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What Are Future Plans for the Allstate Campus?

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Allstate Insurance Company Headquarters was located at the Northbrook campus for more than 50 years.  However, as with many American companies, the pandemic introduced a wide-spread shift for employees to work from home.  With Allstate specifically, close to 95 percent of their employees have chosen to work from home.  The need for the large multi-building campus was no longer needed by the insurance company and it was listed for sale.

According to an article published by TheRealDeal.com, the Northbrook campus was purchased for $232 million.  Due to the shift in demand for e-commerce, commercial property such as this is no longer purchased with the intent to house employees, instead its investors are looking to develop the land to build warehouses. 

The article states, “The Nevada industrial developer that agreed to pay $232 million for Allstate’s suburban Chicago campus aims to transform the site into 3.2 million square feet of warehouses — assuming it gets the approval of local governments.”  Therefore, the key next step, however, will be to get approval from the neighboring towns of Glenview, Northbrook and Prospect Heights.  The developer hopes to gain the confidence of these towns, who may be concerns about the impact of a large warehouse facility as a neighbor. 

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Slow Down in Home Price Gains Reported

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U.S. home prices have consistently risen each month in comparison to the prices in 2020.  As many Americans are aware, the onset of the pandemic created a high demand for homes and with the short supply and low rates, prices increased significantly.

However, a recent report indicates the price increases may be slowing down.  CNBC.com reports in an article written by Diana Olick, “Home prices rose 19.5% in September year over year, down from a 19.8% annual gain in August, according to the S&P CoreLogic Case-Shiller National Home Price Index. That is the first decrease in the annual gain since May 2020.”

Some cities continue to see significant increases in pricing compared to September 2020.  For example, Phoenix home prices grew just over 33% compared to September 2020.  Even some of the cities in America that reported the smallest gains still have increases of more than 10%.

The managing director at S&P Dow Jones Indices, Craig Lazzara, may have coined the most accurate description of this data:  “Deceleration”.  Prices are still strong, it just appears the growth is slowing down a bit.  The combination of an anticipated increase of homes coming on the market with mortgage rates slightly increasing are potential factors.

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FHA Announces Forbearance Extended Relief for Some Homeowners

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DSNews.com released an article announcing some COVID Forbearance extensions that might allow some American homeowners to breathe a sign of relief.   As a result of the “continued impact of the pandemic”, the Federal Housing Administration is providing extended COVID-19 relief for some homeowners.

The extension specifically applies to borrowers who only recently became affected by the pandemic and are seeking mortgage relief.  According to the article, Principal Deputy Assistant Secretary for Housing Lopa Kolluri indicated, “Our top priority is to help as many individuals and families as possible to recover from the COVID-19 pandemic and keep their home.”

As a result, borrowers who are newly affected by the pandemic can now receive up to 6 months of COVID-19 Forbearance.   Additionally, up to 6 months of additional relief may be provided to borrowers who made requests in the past several months, between July 1, 2021 and September 30, 20201.

Read the entire article and see details of the forbearance periods and extensions.

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Home Sales Fall for First Time in 14 Months

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The real estate market in the U.S. has been a red hot sellers’ market for several months, reflected in homes in short supply and high demand, and consistent price increases.  In comparison to August 2020, the median price of an existing home increased almost 15% by August of this year.

However, it appears that the demand for homes may be on the decline.  From July 2021 to August 2021, sales of homes dipped 2%.  In an article published by CNBC.com, it is stated, ‘“The housing sector is clearly settling down,” said Lawrence Yun, chief economist for the Realtors, who called last year’s super surge “an anomaly.’

It would seem that some buyers are deciding to wait for prices to fall or adjust, especially first time home buyers that might be priced out of the market right now.  According to the article, first time home buyers usually make up about 40% of the total buyers, but the percentage has fallen to 29%.

Additionally, it is expected that more housing inventory is on the horizon with the eviction moratorium ending.  Since the inventory of homes had been down 13% in comparison to August 2020, the additionally supply may help ease the supply issue and cause prices to adjust.

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How Has the U.S. Managed to Avoid Another Foreclosure Crisis?

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As the COVID-19 pandemic began to spread across the United States last spring and states announced shut downs, many Americans found themselves unemployed or underemployed.  As a result, the federal government took swift action to provide mortgage payment relief by allowing homeowners to enter forbearance.  A year later, as of March 2021, 2.5 million homeowners were still in forbearance, according to the Mortgage Bankers of America.

Realtor.com published an article, noting the opinions of experts who explain that, despite this alarming number of U.S. homeowners behind on payments, a potential foreclosure crisis is unlikely.  In the article, reporter Sharon Lurye explains, the current housing market conditions are likely to provide a safety net for many of homeowners.  Houses, in many parts of the United States, continue to be in high demand and the inventory remains low.  Coupled with low interest rates, homeowners behind on payments, possible nearing the end of their forbearance, could still decide to sell the home for a profit. Additionally, as Americans getting their footing and learn to adjust to the current conditions, forbearance rates dropping nationwide.

Nevertheless, there are still areas of the country where homeowners are not only seriously behind on payments, but the housing market is not as strong due to weak economies and lack of employment.  These homeowners will continue to need assistance by reaching out to their lender with the hopes of renegotiating the terms of their loan in a way that makes it feasible to make the payments.  Still, some may decide to just sell and move to a rental property, assuming they can find a property to rend. 

The good news, it seems that the U.S. isn’t headed toward a wide-spread foreclosure crisis, however there are Americans that continue to struggle and may for months and years to come.

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Tips for Selling a Home During the Winter of 2021

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The next few winter months are looking to be a pretty optimal time to sell a home.  The mortgage rates continue to remain very low, demand for homes is high and there continues to be a drop in inventory compared to inventory a year ago.  Chief economist at the National Association of Realtors®, Lawrence Yun proclaimed, “It will be one of the best winter sales years ever.”

Nevertheless, selling a home during a world-wide pandemic can offer challenges and sellers are still looking for ways to sell safely and for top dollar.  An article published by Realtor.com, reported Erica Sweeney, has detailed some tips for homeowners selling homes over the next few months.

From a safety perspective, it is important to have a virtual tour available on the listing.  This will allow shoppers to view the home online to get a better sense of the home layout and features.  Doing this will help to keep the number of in-person showings to a minimum.  When in-person showings are scheduled, masks and social distancing should be encouraged and larger time gaps between showings will help ensure the safety of all visitors.  Once the prospective home buyers and agents have left the house, sanitizing all high touch surfaces will keep the home clean for the residents of the home.

Sweeney also gave tips of preparing and pricing a home.  She reports, ‘According to a realtor.com report, the national median home listing price jumped 13.4% in December compared with last year, reaching $340,000, and price per square foot rose 15.9%.’  Sellers and their agents should ensure that they are pricing the house to align with the current market pricing.  To add, highlighting upgrades and updates that buyers won’t have to worry about upon moving in during the winter months as well as features that accommodate work from home and e-learning from home will appeal to buyers that are in the midst of spending more time than normal at home.

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Photo Credit: Nathan Walker

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How Have Home Prices Fared Amidst the 2020 Economy?

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2020 has been a year full of the unexpected and has been unpredictable, to say the least.  The economic effects of the pandemic have been staggering; businesses have had to close or make modifications that result in lost income, many Americans are collecting unemployment due to COVID-19 related layoffs.  In this type of economic climate, it would be expected that the housing market and home prices would suffer as well.

Nevertheless, 2020 has brought drastic increases in home prices.  According to an article published in Realtor Magazine, ” . Existing-home prices for all housing types jumped 15.5% year over year in October to $313,000, according to the National Association of REALTORS®.”  In fact, this year’s home appreciation rate is the fastest appreciation rate the housing market has seen in 6 years.

The home value gains are seen across the United States.  New York saw some of the lowest gains, being up 2.6% over the past year.  However, areas in other parts of the Northwest, such as Maine, saw home values appreciate almost 15%.  Western states are seeing values increase around 12 and 13 percent compared to last year.

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How Long Will the COVID-19 Real Estate Boom Last?

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The pandemic has impacted Americans in a variety of ways.  To say the real estate market, in many parts of the U.S., has changed in unexpected ways would be an understatement.  The demand for homes far outnumbers the supply in many areas of our country.   

According to an article published by CNBC.com,  reporter Kevin Stankiewicz finds, “Existing home sales increased 9.4% in September, surpassing expectations, and the median purchase price rose nearly 15% year over year, according to data released earlier Thursday by the National Association of Realtors.”

Consumers are enticed by low interest rates and, those who can afford and are able to, are moving out of major metropolitan areas to suburban areas or even to second homes in vacation areas, where they might be able to work remotely. 

Although buyers continue to search for homes and rush to put an offer in when they find the perfect home, the number of homes for sale has tightened up.  Nevertheless, it is anticipated that after the election, more sellers may decide to put their homes on the market.  One professional, Glen Kelman of Redfin, is quoted in the article, “I think the sellers are just looking long term at the economy and still feeling some anxiety. Many of them are going to put their homes on the market in January and February.”

While many realize the type of demand for homes that has been occurring since the summer of 2020 cannot last forever, its is expected to continue into the new year as more and more Americans find ways and reasons to relocate.    

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What Went Wrong with the CARES Act?

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In response to COVID-19 related economic struggles many Americans are facing, Congress passed the CARES Act.  One benefit to Americans that was to come from this $2 trillion act that was made law in March 2020, was a ban on evictions on many rental units in the United States.  Effective until the end of July, federally financed properties, such as rental units backed by Fannie Mae and Freddie Mac, landlords were restricted from evicting their tenants.

One glaring issue with the act, according to an article published by CNBC.com is, ” the law failed to protect many struggling tenants during the pandemic because there was little effort to ensure that landlords followed it.”  The act does not detail any penalty for violating it, so it, in some cases, has been treated as more of a “guideline”.   Landlords across the country have moved forward with evicting their tenants, many of which did not realize they were protected by the CAREs Act and did not hire legal representation to assist them with challenging the eviction. 

The effects are devastating.   As one example, in Iowa, he article indicates “Data provided to CNBC by Iowa Legal Aid shows that during one week in July in Polk County, where Des Moines is located, 40% of the families forced to leave their homes were through evictions that violated either the state or CARES Act moratorium. “

President Trump signed an executive order shortly have the CARES Act expired, yet many experts in the housing advocate field indicate that it provides protection to even fewer renters and still does not provide guidance to ensure its enforced.

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Photo Credit: Morning Brew

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How are Small Businesses Weathering the Pandemic?

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Many Americans’ lives have been affected by the pandemic, perhaps medically and emotionally but its also reached their social, academic and professional lives.  Those who have seen some of the most financial impact are small business owners.  Many had to close their doors for a period of time due to local restrictions; even after being able to open, business operations had to be significantly changed.   When small business owners were polled back in April 2020, only about 35% of the owners of small businesses were confident they would still be in business in the next year.

According to an article published by CNBC.com, reported by Lori Ioannou, more and more small business owners are feeling more optimistic.  In a more recent poll, 64% of these small business owners felt that they can remain in business, and in fact, many felt they might also be able to increase revenue.  The article goes on to provide details about what factors are allowing these business owners to feel they have the tools to succeed.

The government programs such as Paycheck Protection Program (PPP) and economic injury disaster loans have, as Ionnau states, “given some businesses a life preserver to ride out the economic uncertainty. And the loans have given owners time to pivot and reinvent their business models so they survive the new normal.”  For example, some businesses have begun utilizing technology more readily by being more active online, creating new products as well as growing their direct-to-customer business model.

Consumers have also rallied to support local businesses by choosing to buy locally.  For example, local restaurants have expresses gratitude to patrons who have ordered curbside or take-out food more frequently than in the past and increasing the amount of their tips to show both financial and emotional support.

As time goes on, some businesses will see that closing their doors might be inevitable and some businesses will thrive and succeed due to creative business practices or just by nature of their business and the product. 

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Photo Credit Tim Mossholder

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