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Newly Formed Impact Housing to Fill Void in Home Ownership Market with Attainable Solutions for Working Families

ATLANTA–(BUSINESS WIRE)–Atlanta-based EcoVest Capital and Place Properties announce the formation of Impact Housing Group. Impact Housing is the country’s first fully integrated, volumetric modular company. Its mission is to provide a solution for affordable homes for America’s working families.

Among the most pressing social needs in the country is to provide attainable housing close to where people work and want to live. As a critical step toward that goal, Impact Housing has acquired a facility in Baxley, Georgia. This facility will be able to assemble 50+ affordable single-family homes per month. At that level of production, the plant will generate 170 new, living-wage jobs. The location of the facility allows Impact Housing to serve the southeastern market. In addition, Impact Housing is under contract to build another volumetric modular plant in Oconee, South Carolina, with plans to build a third plant, beginning in Q4 of 2022.

Cecil Phillips, former executive assistant to the governor of Georgia and past chair of Atlanta Housing, has been named president and CEO of Impact Housing. Phillips has a highly successful track record providing affordable housing for students, armed forces, and working families. According to Phillips, “Beginning in the Southeast and expanding throughout the country, Impact Housing will provide top-rated, quality-engineered and designed housing to serve communities which are frustrated by the deficit of affordable housing for working families. We will provide affordable housing to these markets by developing communities, as well as by selling homes to third-party owners and developers.”

Alan Solon is Chairman and CEO of EcoVest Capital, Inc., an Atlanta-based real estate investment management company and serves as chairman of Impact Housing Group. As CEO of EcoVest, Solon is focused on Environmental, Social and Governance (ESG) pertaining to sound real estate investment and development ventures. “For many working-class families,” says Solon, “inventory is extremely limited for new, affordable, high-quality homes for purchase in the neighborhoods where they work and live. The goal of Impact Housing is to provide an answer to the largest problem in this sector, making attractive, well-constructed homes attainable for these families.”

It’s Phillips’ and Solon’s shared belief that attainable housing can become a reality in the Missing Middle by revolutionizing volumetric modular housing into modern day solutions that families will be proud to live in and call home. Phillips and Solon also believe that you don’t have to sacrifice design and quality for profit. Impact Housing’s manufactured homes are assembled inside the plant then delivered to the site, reducing the time and costs of each home. With no major improvements in efficiency, productivity, or costs in the housing industry in more than 50 years, Phillips and Solon decided to launch Impact Housing where their experience and expertise will yield a viable solution to the housing crisis in the U.S.

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More Consumers Are Optimistic About Their Income Outlook

Income and credit conditions are two main factors that affect the ability of consumers to succeed in obtaining a loan—either for a home or for other personal property. It’s equally important for consumers to be able to repay their current debt. Many families are having to deal with changes in income that affect their ability to obtain credit. Some have lost jobs and some have had to move in with family. Families are moving to different locations due to the various Covid outbreaks in addition to the increase in work-from-home options. The pandemic has led to challenges in the employment market from loss of jobs to less work participation. Incomes have risen over the last year, but the majority of this rise in income was due to unemployment benefits and stimulus. This post looks at the latest trends in perception of ability to obtain credit, income growth, and moving expectations from the Federal Reserve Board of New York’s Survey of Consumer Expectations.

Credit Availability

Prior to the pandemic, 50.6% of consumers reported that credit was equally easy and hard to obtain, but this share went down to 49% in March 2020. As of the December 2021 survey, 49.1% of respondents reported that they feel as though obtaining credit will be equally easy/hard. A lower share of respondents reported that obtaining credit in the year ahead will be easier, at 11.2% . A higher share of respondents, 39.8% reported that they feel obtaining credit in the year ahead will be harder. This trend shows most consumers are leaning toward it being harder to obtain credit. However, there is a segment who feel it will be easier and those consumers are likely to have good credit scores. Incomes have also increased, which could reduce the amount of debt consumers have, creating more opportunity to obtain credit.

Line graph: Credit Availability, Year Ahead, January 2020 to December 2021
Pie chart: Distribution of Expectations on Credit Availability for the Year Ahead

Household Income Growth

The median expected income growth has been generally trending upwards across all income groups compared to one year ago. Those with incomes $50,000 and below expect to experience the biggest growth in income one year ahead at 3.78%. Among households with incomes of $50- $100,000, the median expected income growth is 3.3%. Among households with income of over $100,000, the median expected income growth is 3.4%.

Line graph: Household Income Growth by Income Level, January 2020 to December 2021

Income Growth by Age

Looking at income growth by age, all age brackets experienced steady income growth over the last year. Among households headed by a person age 60 years and over, the median expected income growth is 2.93%. Those who are over the age of 60 are more likely to have fixed incomes and may be retired. Those incomes will not be affected by the pandemic in the same way as incomes of the younger demographic age group that are still in the job market. With sustained job growth, households headed by persons below 40 years old experienced the biggest gain in median expected income growth of 4.35%. Among households headed by persons 40 to 60 years old, the median expected income growth is 3.3%.

Line graph: Household Income Growth by Age, January 2020 to December 2021

Moving Expectations

The pandemic has had a big impact on moving expectations. The housing market changed drastically as home sales have continued to increase over the last two years. Some consumers have chosen to move farther away due to work-from-home opportunities. Some families have taken advantage of the increased equity in their homes and have sold and moved as a result. Expectations have grown over the last year and were at their highest in October 2021. In the December 2021 survey, the mean probability that a household will move was 16.7%. This is slightly above the probability at the beginning of the year at 14.93%.

Line graph: Moving Expectation: Probability of Changing Primary Residence Over Next 12 Months, January 2020 to December 2021

Debt Delinquency

Consumers of all ages have gotten back to being able to pay their debts at pre-pandemic levels. In February of 2020, households found it more difficult to make a minimum payment on their debt. Households headed by persons under 40 years old have the most difficult time making their minimum payments, with a probability of 13.4%. Households headed by persons over 60 years old have the least difficulty making a minimum payment on their debt.

Line graph: Probability of Not Being Able to Make a Minimum Debt Payment, August 2019 to December 2021

Consumers who have steady good credit and stable incomes will be able to get through the lending process when buying a home. While mortgage rates are climbing, they are still low compared to pre-pandemic levels (4% in 2019). Buying a home can be a good investment for the long term and a way to have a fixed housing payment, unlike rental payments. There is also a share of home owners who are taking advantage of being able to refinance their home and lower their monthly mortgage payments. Consumers who find themselves still working on improving their financial situation can continue to work on improving credit scores, increase savings, and building on their financial literacy.

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Home Buyers Narrow Home Search With Technology

Home buyers who successfully purchased a home last year only viewed a median of eight homes before purchasing. For some buyers who put down multiple contracts and repeatedly lost bidding wars, this may seem like very few, however for others who found limited housing inventory in their area, it may seem like a wide selection.

Looking at the number of homes viewed historically provides a better perspective. NAR Research has tracked the number of homes viewed since 1987. Viewing eight homes before purchasing is the lowest number reported. At the height, buyers viewed 12 homes before purchasing in 2009 and 2011 as inventory was plentiful, following the Great Recession. During the housing boom years, 2004 to 2006, homes were moving at a rapid pace, but typically nine homes were viewed. Limited housing inventory has likely played a key role here. If there are few homes for sale in a price bracket, there are few homes to see. From the November 2021 existing-home sales data, there are just 1.1 million units for sale, a 13.3 percent decline from a year ago. However, one important change has happened since 2006: technology.

Line graph: Number of Homes Viewed, 1987 to 2021

Home buyers today have the ability to view homes online and quickly weed out what they want to see versus what can be discarded. Buyers can walk through virtual tours, view videos, see detailed photos in a way, 2006 technology did not allow. Among the eight homes viewed by buyers—three were viewed only online through virtual tours, virtual video tours, or virtual open houses. In 2006, 80% of buyers used the internet to search for homes. Today, that share is 95% of buyers. (It is shocking that 5% of buyers do not use online tools in the search process, but a similar share bought from the previous owner who they likely know. They likely are familiar with the property.) In 2006, 24% of buyers first spotted their home online. Today, that share is 51%.

Bar graph: Home Buyer Use of Tech, 2006 and 2021

Technology and tight inventory have also likely played a role in the number of weeks a buyer is searching for a new home. Buyers searched for just eight weeks before deciding on the home to purchase. From 2009 to 2013 buyers took their time and looked at homes over 12 weeks. As homes were moving at a slower pace, they could decide over a longer timeframe and perhaps view a home several times before putting in a contract. Buyers today do not have that luxury and need to make fast decisions on which home to place on offer on, as there is likely another buyer ready to pounce right behind them. From the November REALTORS® Confidence Index, homes typically had 3.8 offers in November 2021.

Line graph: Number of Weeks Searched, 1989 to 2021

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Why Christine Ebersole’s Home Is Furnished With Broadway Castoffs

Christine Ebersole’s journey from an impeccably renovated midcentury house in the San Fernando Valley to a tatterdemalion side-hall colonial in Maplewood, N.J., involved one husband, three children and seven pets. But it began with an agent who suddenly stopped dialing for dollars on his client’s behalf in the late 1990s.

“I was in my mid-40s, and was basically told that it was over for me,” said Ms. Ebersole, 68, a two-time Tony Award winner (for the musicals “42nd Street” and “Grey Gardens”) and a star of the CBS comedy “Bob Hearts Abishola,” now in its third season. “I didn’t believe it, thankfully. I have this God-given talent, and I’ve been a good steward of it. The things I couldn’t control were my body and my face, and gravity taking hold — that kind of thing — but my talent hadn’t changed.”

“They say the older actors get, the farther east they move, so I figured the East Coast was where I needed to go,” continued Ms. Ebersole, who has a small but eye-catching role in the recently released movie “Licorice Pizza,” and whose new collection of standards, “After the Ball,” is due out in February. “We’ll all end up in China.”

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BBX Capital, Inc. to Participate in Sidoti & Company Winter Virtual Small Cap Conference

FORT LAUDERDALE, Fla.–(BUSINESS WIRE)–BBX Capital, Inc. (OTCQX: BBXIA) (PINK: BBXIB) (“BBX Capital” or the “Company”) announced today that the Company plans to participate in the upcoming Sidoti & Company Winter Virtual Small Cap Conference on January 19 and 20, 2022.

Mr. Jarett Levan, President and Chief Executive Officer of BBX Capital, will host one-on-one meetings with investors during the virtual conference. Joining Mr. Levan will be Mr. Brett Sheppard, Chief Financial Officer, and Mr. Leo Hinkley, Investor Relations Officer.

To register for the one-on-one meetings, visit www.sidoti.com/events. Registration is free, and you do not need to be a Sidoti client.

About BBX Capital, Inc.: BBX Capital, Inc. (OTCQX: BBXIA) (PINK: BBXIB) is a Florida-based diversified holding company whose principal holdings include BBX Capital Real Estate, BBX Sweet Holdings, which includes IT’SUGAR, and Renin. For additional information, please visit www.BBXCapital.com.

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For Two Roommates, the Fine Print Held a Big Surprise

“One of the hardest parts about moving to New York,” Ruthie Landry said, “is finding out about renters’ rights.”

For Ms. Landry, 27, Covid-19 accelerated the learning process. Along the way there were plenty of discoveries — and the biggest came at the end of her journey.

Just a week into the pandemic, one of her two roommates announced that she was leaving the city. This meant that Ms. Landry and her other roommate, Dana Schulman, had a three-bedroom in Williamsburg, Brooklyn, that they couldn’t afford. The departing roommate agreed to pay her share of the rent until the lease was up, but renewing at the same rate was out of the question.

Ms. Landry and Ms. Schulman were relatively new to the city, less than two years out of Johns Hopkins University. They met through a local sorority when Ms. Schulman, a year behind Ms. Landry in school, made a campus visit as a high school senior. “Originally, I slept on her floor,” she said. “Now I’ve worked my way up to my own bedroom.”

soared back to prepandemic levels. Steep discounts are no longer the order of the day, but Ms. Landry and Ms. Schulman are able to stay in their apartment for another year, in large part, because their rent will increase only by $36 — and that won’t kick in until after an initial six-month freeze on rent increases, implemented for rent-stabilized apartments by the Rent Guidelines Board in June 2021.

Ms. Landry’s partner started looking for his own new apartment shortly after she and Ms. Schulman found their place. “I told him to start asking if they’re rent stabilized,” she said. “It pays to be empowered with all the information. And tools. Even TikTok.”

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Essex Reports Characteristics of 2021 Dividends

SAN MATEO, Calif.–(BUSINESS WIRE)–Essex Property Trust, Inc. (NYSE:ESS) announced today the income tax treatment for its 2021 distributions to shareholders. The 2021 distribution characteristics are as follows:

Common Stock – CUSIP Number 297178105:

Record

Payment

Cash

Distribution

Ordinary

Taxable

Return of

Capital

Gain

Unrecaptured

Section 1250

Capital Gain

 

Section

199A

Sec. 897

Capital

Date

Date

Per Share

Dividend

Capital

(20% rate)

(25% rate)

Dividend

Gains

1/4/2021

1/15/2021

$2.07750

$1.47343

$0.00000

$0.45854

$0.14553

$1.47343

$0.60407

3/31/2021

4/15/2021

$2.09000

$1.48229

$0.00000

$0.46130

$0.14641

$1.48229

$0.60771

6/30/2021

7/15/2021

$2.09000

$1.48229

$0.00000

$0.46130

$0.14641

$1.48229

$0.60771

9/30/2021

10/15/2021

$2.09000

$1.48229

$0.00000

$0.46130

$0.14641

$1.48229

$0.60771

 

Totals:

$8.34750

$5.92030

$0.00000

$1.84244

$0.58476

$5.92030

$2.42720

 

Percentages:

100%

70.923%

0.000%

22.072%

7.005%

 

 

For purposes of calculating alternative minimum taxable income under Sec. 55 of the Internal Revenue Code of 1986, the Company apportions $0.17 per common share attributable to depreciation assuming a full year of ownership.

The Company did not incur any foreign taxes during 2021.

Shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of Essex Property Trust, Inc. dividends.

About Essex Property Trust, Inc.

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 247 apartment communities comprising approximately 60,000 apartment homes with an additional 3 properties in various stages of active development. Additional information about the Company can be found on the Company’s website at www.essex.com.

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If My Roommate Stops Paying Rent, Am I on the Hook for It?

Q: In 2020, I lived in a three-bedroom apartment with two roommates. We all signed the lease, but each of us paid portions of the security deposit directly to the landlord. We also the paid the rent in three separate checks. During the pandemic, one roommate moved back home and stopped paying rent, while the other roommate and I stayed through the end of the lease and paid our portions of the rent on time. When we moved out at the end of the lease, we left the apartment in good condition, but when it came time to get our security deposit back, the landlord withheld the money on account of our former roommate. Can the landlord do this? What are my legal options to recoup my portion of that money?

A: When you and your roommates signed the lease, all of you assumed responsibility for the terms of the agreement, so all of you are on the hook for anything that goes wrong. If someone damaged the walls or painted a room turquoise without permission, you would be responsible for the costs, even if you weren’t the culprit. The same goes for unpaid rent: You are responsible for the entire rent, not just your portion of it. The landlord can withhold your security deposit over any unpaid rent.

“Given that there was unpaid rent, the landlord was completely within their rights to withhold the entire security, and the remaining tenants have no claim for it,” said Samuel Himmelstein, a Manhattan lawyer who represents tenants.

moved out of the city during the pandemic, leaving roommates on the hook. If you ever find yourself in a similar situation again, know that the state’s rent laws allow you to find a new roommate. You do not need your landlord’s permission or approval to do this — you can simply find a person willing to rent the room, collect the rent directly from that person, and pay it to the landlord. This would have allowed you to pay rent in full for the rest of the term, and collect your security deposit at the end.

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Housing Affordability Conditions Slightly Weaken in November

At the national level, housing affordability slightly fell in November compared to the previous month according to NAR’s Housing Affordability Index. Compared to the prior month, the monthly mortgage payment increased by 0.9% while the median family income rose modestly by 0.2%.

Compared to one year ago, affordability declined in November as the median family income rose by 4.7% while the monthly mortgage payment increased 19.4%. The effective 30-year fixed mortgage rate1 was 3.12% this November compared to 2.82% one year ago, and the median existing-home sales price rose 14.9% from one year ago.

Line graph: Housing Affordability Index November 2020 to November 2021
Line graph: Median Family Income, November 2020 to November 2021

As of November 2021, the national and regional indices were all above 100, meaning that a family with the median income had more than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments on a 30-year fixed mortgage loan with 20% down payment account for 25% of family income.2

The most affordable region was the Midwest, with an index value of 200.9 (median family income of $86,881 with the qualifying income of $43,248). The least affordable region remained the West, where the index was 112.1 (median family income of $94,663 and the qualifying income of $84,480).  The South was the second most affordable region with an index of 149.3 (median family income of $80,428 and the qualifying income of $53,856). The Northeast was the second most unaffordable region with an index of 155.1 (median family income of $99,593 with a qualifying income of $64,224).

Bar graph: U.S. and Regional November Housing Affordability, 2021 and 2020
Bar graph: U.S. and Regional Median Family Income and Qualifying Income

Housing affordability3 declined from a year ago in all the four regions. The South had the biggest decline of 15.2%. The Midwest region experienced a decline of 7.4%. The West and the Northeast both shared the smallest dip of 6.6%.

Affordability was only up modestly in the West 0.2% from last month. The Midwest was down modestly 0.1% followed by the Northeast with a decline of 0.6%. The South had the largest decrease of 1.4%.

Nationally, mortgage rates were 30 basis point from one year ago (one percentage point equals 100 basis points).

Compared to one year ago, the monthly mortgage payment rose to $1,242 from $1,040, an increase of 19.4%, The annual mortgage payment as a percentage of income increased to 16.9% this November from 14.8% from a year ago due to higher home prices and only modest gains in median family incomes. Regionally, the West has the highest mortgage payment to income share at 22.3% of income. The South had the second highest share at 16.7% followed by the Northeast with their share at 16.1%. The Midwest had the lowest mortgage payment as a percentage of income at 12.4%. Mortgage payments are not burdensome if they are no more than 25% of income.4

Bar graph: U.S. and Regional Mortgage Payment as Percent of Income, 2021 and 2020
Line graph: Monthly Mortgage Payments, November 2020 to November 2021

This week the MBA reported mortgage applications increased 1.4% from a week earlier. Mortgage credit availability increased in December.  Incomes are growing 4.7% while home prices are growing 14.9% which is contributing to dampen affordability conditions. Mortgage rates are still historically low but have been above 3% for the last two months.

What does housing affordability look like in your market? View the full data release.

The Housing Affordability Index calculation assumes a 20% down payment and a 25% qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.


1 Starting in May 2019, FHFA discontinued the release of several mortgage rates and only published an adjustable rate mortgage called PMMS+ based on Freddie Mac Primary Mortgage Market Survey. With these changes, NAR discontinued the release of the HAI Composite Index (based on 30-year fixed rate and ARM) and starting in May 2019 only releases the HAI based on a 30-year mortgage. NAR calculates the 30-year effective fixed rate based on Freddie Mac’s 30-year fixed mortgage contract rate, 30-year fixed mortgage points and fees, and a median loan value based on the NAR median price and a 20% down payment.

2 The 25% mortgage payment to income share takes into consideration that a homeowner has other expenses such as property insurance, taxes, utilities, and maintenance, so that total housing expenses are no more than 30% of income. Housing costs are not burdensome if they account for no more than 30% of income.

3 A Home Affordability Index (HAI) value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20% more than the level of income needed pay the mortgage on a median-priced home, assuming a 20% down payment so that the monthly payment and interest will not exceed 25% of this level of income (qualifying income).

4 Total housing costs that include mortgage payment, property taxes, maintenance, insurance, utilities are not considered burdensome of they account for no more than 30% of income.

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