February Is A Big Concern Month For Cockroaches

Happy February to everyone of course but not to those pesky cockroaches. Why? February is a big concern month for cockroaches. Their nesting pattern leads to hatchings of new generations of cockroach every 4-6 weeks. Once they begin hatching, they are a pain to get rid of. The most persistent cockroaches you commonly see in your home, found primarily in kitchens and bathrooms, are German cockroaches.  German cockroach (Blattella germanica) is a small species of cockroach, typically about (1.1 to 1.6 cm) (0.43 to 0.63 in) long. In color it varies from tan to almost black, it has two dark, roughly parallel, streaks on the pronotum running anteroposterior from behind the head to the base of the wings. Adult American cockroaches average between 1.4” to 1.6” (35-41mm) in length, but they can grow to exceed 2”. American cockroaches are reddish brown in color with a yellow band that outlines the area behind their head. Both males and females have wings and can fly short distances. Another larger roach is the oriental cockroach, also known as the water bug or black beetle, is a large species of cockroach, adult males being 18–29 mm and adult females being 20–27 mm. It is dark brown or black in color and has a glossy body. Roaches are nocturnal creatures and usually spend most of their days hiding away in the dark, but their metamorphosis cycle continues all year round.

What is attracting these cockroaches to my home? With everyday living many nonchalant behaviors we think are harmless may be leading to cockroaches. For example, dirty dishes in the sink, garbage, excess moisture and crumbs on the floors and counters, even pet food. Wiping the sinks and bathtub dry after each use will lessen populations because insects need more water than food.

How do you prevent these cockroaches from entering your home? Good question. Preventative measures such as, a clean & tidy living area, wash dishes and put them away after meals, clean crumbs and spills immediately, take out the garbage before going to bed and remove grease from the stovetop. Dixie Exterminators, Inc. is an advocate of Integrated Pest Management (IPM) is an effective and environmentally sensitive approach to pest management that relies on a combination of common-sense practices. IPM programs use current, comprehensive information on the life cycles of pests and their interaction with the environment. Pest Exclusion is always viable to sealing up construction gaps and applying chemical treatments on the perimeter of home.

This information was provided by one of our preferred vendors, Dixie Exterminators, Inc.

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What Is a Rent-Back Agreement? A Godsend to Home Sellers Not Ready to Move

As a Buyer’s agent, I have experienced the heartache of watching clients find a great home only to be one of many offers in a highest and best bidding war and losing out for one reason or another. To put into context what ‘many’ could mean in our current market of extremely tight inventory combined with historic low interest rates, the last multiple bid offer I was a part of had 30 offers in 24 hours. 30!!! So what can you do as a Buyer to insure your offer is the winning offer?
There are multiple ways to be as competitive as possible in a Seller’s market and this article touches on one strategy frequently overlooked. The ‘rent back’ option. If you’re trying to buy a home that is currently occupied, the Seller may not have bought another home yet, and in fact may not have even started looking. Check out the advantages and disadvantages of adding a ‘rent back’ clause to your offer.

What is a rent-back agreement? You’ll definitely want to know if you’re buying a new home while selling the one you’re currently living in. As you might imagine, this double transaction can require some reallygood luck, timing wise, to get just right. After all, if you sell your home and have to move out before you’ve closed on your new home or even found a place to live, that means you’ll have to either couch surf or pay to stay in hotel limbo. Either way, you’ll have to endure the hell of moving twice.

Not so with a rent-back agreement, which gives the sellers extra time to live in the home after closing, essentially letting them become the new buyer’s temporary tenants. It doesn’t last for long—there are usually time limits—but it will give sellers a chance to close on their new home and pack up for the big move.

For the buyer, offering a rent-back agreement can have a couple of big bonuses. For one, if it’s a competitive market, an offer that’s flexible on move-out dates might very well have an edge. And the rent that the seller would pay the buyer could help recoup those hefty closing costs.

Done right, it can benefit everyone, but there are some things to consider before you jump on board.

How a rent-back agreement works
Like the name implies, rent-back agreements are legally binding agreements made in writing between the buyer and the seller. Both parties need to decide on a couple of issues, namely how long the seller will need to stay in the house after closing and how much rent the seller will pay to be there. To figure out what rent would be fair, check out comparable homes for rent in your area, then do the math.

To play it safe, the buyer may also charge a refundable deposit, just like any landlord would.

“There’s always the chance that damages could occur while the seller is living there. That’s why it’s a good idea to have a holdback deposit of anywhere between $5,000 to $10,000,” says Emily Beaven, a Realtor® with Coldwell Banker in San Francisco. Here’s how to find a real estate agent in your area.

Once everyone agrees, the buyer will close on the house, at which point the buyer will officially take possession and pay any upfront costs like a normal closing. In addition, the seller will pay any security deposits or upfront rent and remain in the house.

What rent-back agreements mean for the seller
Getting more time to buy your next dream home can be a lifesaver, but don’t dawdle—a rent-back agreement won’t buy you much time.

“Typically, lenders won’t accept anything longer [than] 60 days,” Beaven says.

While you’re still at the property, there’s one more potential downside to deal with: It isn’t really yours anymore. You technically have a landlord now, which means if you cause any damages, you may not get your security deposit back.

What rent-back agreements mean for the buyer
If you’re not in a rush to move in, offering a rent-back agreement can help you get your dream home.

“It really can make your offer stronger,” Beaven says, but don’t take it too lightly. Since you’re the new owner (and the new landlord), you might run into a few new problems.

“The buyer, like a landlord, is now responsible for making any repairs should, say, your water heater break,” Beaven says. Plus you may have to make those repairs immediately.

Buyers will also have to worry about the sellers actually moving out on time. It’s rare that they drag their feet, but it can happen. If so, you will have to go through the usual process landlords do to evict your tenants, which is rarely pleasant. Still, odds are all will go fine, and your sellers will be grateful they won’t have to move twice.

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Centennial Yards: A Study in Post Pandemic Mixed-Use Development

Mixed-use developments had been the hot trend in commercial real estate for a number of years and was only getting hotter as the pandemic hit in early 2020. These walkable communities bring residential living and/or office space together with shopping, restaurants, and entertainment venues to create vibrant live-work-play environments. This urban redevelopment trend had gained steam for a number of years, spreading to suburban downtown areas as well.

Many mixed-use megaprojects around the US were already in the works at various stages of planning and construction as the pandemic spread around the globe during the last year. In Atlanta, one such project is Centennial Yards, the $5-billion facelift to an area locally referred to as “The Gulch”. This project will greatly increase the walkability of downtown Atlanta by connecting major attractions like State Farm Arena, Mercedes-Benz Stadium, CNN Center and Centennial Olympic Park with 15 blocks of mixed-use residential, retail, and office space.

This mammoth project was conceived and construction was well underway before the pandemic arrived and put the entire restaurant and entertainment industries on pause. Of course, a major driver for the popularity of these mixed-use developments are the food, sports, and entertainment options all within walking distance of your primary residence. It is not yet known how Covid-19 will affect the demand for these nightlife hotspots in the long-term, but it is definitely something that developers will have to consider as they push forward with the execution of their plans.

Adaptability in design to meet a variety of needs and demand is a big reason why mixed-use developments have taken off so rapidly in recent years. Developers, already locked into previously approved projects, are betting big on this adaptability feature to ensure that these remain financially viable projects for the foreseeable future. Defining the right mix of between residential and retail will be closely evaluated, and developers will have to make these decisions in real-time. 

There will undoubtedly be more focus on creating spaces that are healthier and safer. Healthy building standards will likely be introduced concentrating on the air we breathe in shared spaces. The incorporation of outside air will be a major part of future builds, bringing in fresh clean air and helping to dilute the passage of airborne contaminants.

As the years-long construction phase of the Centennial Yards project continues it will be interesting to see how the pandemic affects the end result of the project, and what choices the developers will make in both the mix of retail to residential of the overall project and in the new focus on building safe and healthy environments. 



We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

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Did You Accomplish Your 2020 Real Estate Goals

With all the craziness that happened in 2020 were you able to accomplish your real estate goals for the year and have you set new goals for 2021?

Are you, or someone you know, considering buying, selling, or investing in residential or commercial real estate within the next 12 months?

Buying? Interest rates remain at historic lows in the low to mid 2% range which gives buyers more buying power and bang for their buck. Are you wondering how much you might qualify for and need the name of a trusted residential or commercial real estate lender? We can help.

Selling? Inventory is still very low and as a result the basic law of supply-and-demand applies now more than ever in the real estate market. So if you have been considering selling, right now would be the time to take advantage of selling at the peak of the market.

Additionally, selling in the winter months when your competition is lower than the springtime will even further your opportunity to get top dollar for your property.

Investing? It’s always a good time to invest in real estate and in fact, despite the amazing run the stock market is having right now, real estate has outperformed stocks by a 2 to 1 ratio for the last 20 years and there are no indications that will change anytime soon. So even if you are currently invested heavily in stocks, real estate is always a great way to diversify your investment  portfolio. https://www.investopedia.com/investing/reasons-invest-real-estate-vs-stock-market/

Refinancing? Simply refinancing and dropping your interest rate by as little as 3/4% to 1%  could save you several hundred dollars a month on your monthly mortgage. Need the name of a trusted residential or commercial real estate lender? We can help.

Renovating? You’ve owned your property for a while and you are still fond of it, but it’s no longer exactly what you need/want, or, you are concerned you won’t be able to find exactly what you are looking for in this competitive market, and you question whether or not you should put it up for sale and move on, or upgrade and settle in for the long haul? We can help answering that question.

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6 Goals for Home Buyers This Year

Are you thinking of buying a home this year? We’ve compiled 6 easy goals for home buyers that will make it easier to find their dream home this year.

  1. Limit Your Subscriptions

Monthly and yearly subscription services are certainly convenient for our busy lives, but they can add up quickly. Some examples of recurring subscriptions that we often look past are:

  • Gym Memberships
  • Magazine Subscriptions
  • E-book services
  • Video-streaming and add-on TV services
  • Mobile apps with monthly fees

The internet can make it very easy and convincing to sign up for a new service or subscription, but now that you are interested in buying a home, determine which subscriptions and services you can’t live without and which ones could be terminated, at least until you find your perfect new home. The extra money that’s not being spent on frivolous subscriptions and services, will turn into extra money you can put towards your down payment, other home costs, or an emergency fund.

  1. Avoid Large Purchases

When in the market for buying a new home, it’s smart to avoid taking on large amounts of debt if you can help it. Whether you were thinking about buying a new car or planning an extravagant vacation, it’s best to hold off on these plans until after the purchase of your home – even if you have already been pre-approved. Your debt-to-income (DTI) ratio is very important when buying a home – in other words, the amount of money you make compared to how much debt you have will significantly affect how much money a lender will give you. Lenders look closely at your monthly payments when you apply for a mortgage loan; and lenders are more specifically checking if your monthly payments exceed 43% of your pre-tax income. Making a large purchase will add towards your monthly payments, increasing your DTI. A higher DTI could result in delays or even a turned-down loan. If you absolutely need to make a large purchase during this time, speak to your loan officer beforehand as they can try to re-approve your loan with the new hypothetical payment.

  1. Improve/Maintain Your Credit Score

Having a good credit score will put you in a strong position to qualify for a better mortgage rate. Your credit score and history will be one of the first things a lender looks at when considering you as a borrower. Lenders prefer borrowers who have a history of paying off credit cards and other revolving credit on time because it gives them assurance that you are a responsible borrower and less of a risk. A good or excellent credit score status will help your mortgage process go much more smoothly for all parties. On the other hand, a low credit score can negatively affect how much money a lender is willing to loan you, along with higher interest rates. Even just a few percentage points differences in an interest rate can cost you thousands over the life of a loan. It’s extremely important during this time to monitor your credit closely, especially fraudulent activity, to prevent any surprises from happening that could delay or endanger your loan application process. If you are unsure of your credit score, or want to know how to improve on your current score, there are countless financial websites that offer credit score monitoring and free reporting, as well as information on how to improve your current credit score.

  1. Organize Your Finances

Buying a new home means you will need cash up front, otherwise known as a down payment. Plan to save enough to cover your down payment, closing costs, moving expenses, and to build or improve on your emergency savings. If there is one thing that the year 2020 taught us, it’s that it’s important to have some sort of savings or emergency funds in place. Some say the rule of thumb is to have three to six months of living expenses saved up. But if you currently don’t have any emergency savings right now, that doesn’t mean you can’t start saving now. Start small; plan and decide how much money you will put away each week or month into the fund and start building from there. This plan can also give you a realistic timeline to work with.

  1. Get Taxes Done Early

Those who are expecting tax returns often have plans for that money before it even arrives. But if you’re a potential home buyer, that tax refund can help with a down payment and/or closing costs on a new home. This means, the sooner you get your taxes filed, the sooner your refund will come. Even though for most taxpayers, taxes are due by April 15th, you can electronically file your taxes much earlier than that. IRS data shows that taxpayers who filed by late February get significantly larger refunds than those who file later. So, if you’re expecting a tax return this year and also in the market for buying a new home, we suggest filing your refund as early as you can. This is definitely not the year to procrastinate.

  1. Don’t Forget to Enjoy Yourself

Remember that buying a new home should be an exciting time of your life. Try to lighten the pressure as much as you can when you are feeling too overwhelmed with the buying process. The perfect home you envision is out there somewhere, you just need to find it! Enjoy yourself during the process, especially if you are home hunting with your loved ones. A fun way to get out of the rigidity of the home buying process is to visit some neighborhoods you are interested in and explore. Walk around the neighborhood, get something to eat, see what the local shops are like, and experience what it’s like to be there during the day and night.

By our Preferred Vendor, Choice Home Warranty.

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How Home Buyers Win in a Competitive Real Estate Market

Housing inventory is low, but demand for quality housing remains high. It’s a very competitive real estate market for home buyers right now and you may be wondering how to keep up. Continue reading to find out how home buyers can win in a competitive real estate market.

Prepare and Plan to Win

The very first step to win in a competitive real estate market is to hire the professionals who do this every day – because they know how to put you in the best position to succeed. How do you know you are hiring the right professional? A good clue is if they start the conversation by asking what’s most important to you in buying a home. Real estate professionals work for you, and they have a fiduciary duty to use their knowledge and expertise to look out for your best interest in any real estate transaction. They say if you fail to plan, you plan to fail. So be sure to prepared and have your strategy and buying timeline planned out sooner than later.

Manage Expectations

Now that you have prepared and planned for the home buying process and have a real estate team to work with, it’s time to manage your expectations. One aspect of managing expectations is your budget. As a buyer, you need to be realistic about how much you can afford – and that goes beyond just the down payment. You may even want to shop below your price range to guarantee a little wiggle room.  Speak with your real estate professional about extra costs you should be expecting. Extra costs of buying a home besides the down payment could be:

  • Appraisal
  • Attorney Fee
  • Escrow Fee
  • Home Inspection
  • Homeowner’s Association and Insurance
  • Title Insurance

Create a “Must Have” List

Once you have managed your expectations within your budget, narrow down your search by creating a “must have” list. To start, begin writing down everything and anything you could think of that could or would sway your buying decision in one direction or the other. This initial list should be as long and as detailed as you can make it. Your list can be anything from how far of a commute you will tolerate, to hardwood floors. Don’t try to rush this list, either. Spend as much time as you need to create your list as it will become important later. Once your full list is complete, break down each item on the list into three categories:

  • Must Haves – Non-negotiable items and features of the home you are not willing to buy without having

Example: 3 bedrooms. If there is not 3 bedrooms, eliminate the home from consideration.

  • Need – Almost a must have, but could be compromised on if necessary

Example: Large yard for kids/pets. Maybe the yard isn’t as big as you had hoped, but there is a park nearby and a safe neighborhood to walk in.

  • Want – Could easily be made up for compromises elsewhere

Example: A modern kitchen. The kitchen may not be super modern and brand new, but it’s spacious, bright, and has a lot of potential that you can renovate down the line.

Closing the Deal

When trying to close the deal on the home you really want, a personal connection can go a long way. If you feel like it will increase your chances of getting the home, include a thoughtful note to the seller to help win them over. After all, selling a home that you have lived in for a while or even raised a family in, can be a hard and emotional process. Most sellers will appreciate to know that the home will be in good hands with its next owners. Writing a heartfelt letter about why you love their home can help you stand out among competing offers. You could share your story and what it would mean to you to live in their home, or even compliment and point out features of the home that you really loved. It may just be the push you need for the sellers to choose you.

By our Preferred Vendor, Choice Home Warranty.

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What Can Commercial Real Estate Expect from the Biden Administration’s Economic Policies?

This is the second in a series about how Biden’s policies will differ from those of the current administration. In my first article, I examined the potential impact of Biden’s expected tax proposals. In this article, I explore the expected spending priorities and regulatory approach, as well as the broader economic climate.

Buried under the shocking scenes of rioting at the capitol is the fact that the Democratic Party will control both houses of Congress for at least the next two years. The party’s sweep in the Georgia runoff elections dramatically raises the odds that the Biden Administration will be able to implement much of his campaign platform. However, the razor-thin edge in both houses will likely temper the scale and ambition of his initiatives.

Clouds in the short-term forecast

“What’s good for General Motors is good for the country, and visa versa.” Though that (in)famous quote by GM’s former president is often misleadingly taken out of context, we could say the same for the commercial real estate sector. Commercial real estate prospers when the country’s economy is robust, and economic growth certainly benefits from strong property markets.

Indeed, no factor will be more critical for real estate’s overall vitality than the speed and strength of the economy’s recovery from the pandemic recession, and then the longer-term economy’s growth prospects. The economy was clearly weakening in the latter months of 2020 as the number of COVID-19 again surged to new record levels, providing Congress with the impetus to finally enact a second pandemic relief package.

The $900 billion in stimulus will help the economy get through the next few months, but more aid likely will be needed once some of the key provisions of this latest bill expire at the end of March. However, with Democrats soon to control the Senate, another, and larger, pandemic-relief bill seems almost certain to be enacted early in the Biden Administration. Major elements of Biden’s “Emergency Action Plan” could include raising the $600 stimulus checks by $1,400 for a total of $2,000 per family member; extending unemployment benefits beyond March; and providing fiscal relief to broke state and local governments. These should keep propping up the economy a while longer.

Nonetheless, real healing cannot begin until vaccine distribution reaches a critical mass so that consumers and businesses believe it’s safe to resume regular economic activities. Until then, property markets will suffer along with the larger economy. Not all sectors, however. The industrial sector is thriving with the surge in e-commerce. Online shopping will recede as the economy reopens, but other drivers should keep warehouse demand growing for years to come. But other major CRE sectors will all endure dampened property demand to varying degrees, at least until growth resumes a healthier pace.

Of more direct consequence for residential landlords, the second coronavirus relief bill also extended the eviction moratorium for many needy tenants to the end of January, and allocated $25 billion in grants to state and local governments for housing-related assistance to low-income households for up to 12 months. Biden’s emergency stimulus bill could extend the eviction moratorium further, following the lead of New York, Oregon, and other states.

Another possible direct benefit to the retail sector: help for the beleaguered restaurant industry. The revised Health and Economic Recovery Omnibus Emergency Solutions (HEROS) Act passed by the House in September included $120 billion in targeted relief for restaurants. Though not explicitly endorsed by Biden, a similar provision could be included in any future stimulus package.

Sunnier skies in the longer-term

Looking past the pandemic, growth prospects for later this year and beyond will depend partly on Biden’s economic policies as well as the degree of damage the economy sustained during the pandemic. There is every reason to expect a surge of pent-up demand once the economy fully reopens, though recent delays in the vaccine rollout suggest widespread distribution may not occur before the summer.

For now, the primary headwind to economic growth and property demand is not consumer spending, which has held up remarkably well overall during the recession thanks to government largesse and buoyant equity markets. Rather, the constraints are on the supply side of the economy. Countless small businesses have close temporarily due to the pandemic, but many have now shuttered permanently, destroying millions of jobs in the process.

More than any other single factor, it is job growth that fuels property demand: for apartments and houses to shelter the workers; for the offices and warehouses where they work; and for the stores where they’ll shop. Economic growth and property demand in the coming quarters will depend greatly on how many of these firms can survive, how quickly the failed businesses can be replaced, and thus how quickly jobless workers can be rehired.

Raining carrots and sticks

Beyond the tax policies analyzed in my previous article, Biden has proposed various initiatives that would influence economic growth or have more direct impacts on commercial property markets.

Increased Federal spending: Biden proposes to significantly increase government spending in several key areas, including infrastructure, health care, and education. Independent assessments estimate the total bill would amount to over $7 trillion, much of it front-loaded to jump-start the recovery. Biden won’t get everything he wants, but the Democratic Congress will support much of his agenda.

Business regulation: Biden will try to reverse much of Trump’s business-friendly deregulatory agenda. The incoming Administration will likely immediately terminate any Trump initiatives still in the approval pipeline and work to overturn many that have already been enacted, mainly related to the environment, public health, and banking. The energy and financial sectors are likely to see less favorable regulatory treatment.

Immigration: Biden promises to roll back Trump’s immigration restrictions where he can and ask Congress to expand legal immigration. In particular, we can expect Biden to push to make the Deferred Action for Childhood Arrivals (DACA) program permanent and increase the number of refugees and asylum seekers allowed to enter the country. Expanding immigration would raise aggregate demand and GDP growth and could grow the pool of workers in sectors that suffered from shortages prior to the pandemic, such as construction and nursing.

Trade: Trade is one policy area when Biden shows more kinship with Trump. Though not as protectionist, Biden is not a strong free-trader and, like Trump, wants tougher trade practices with China. Biden also seeks to “re-shore” American jobs through his “Made in America” program to increase government purchases of American-made products. But overall, trade tensions should ease should under the Biden Administration.

Economic development: The Opportunity Zone program was enacted as part of the 2017 Tax Cut and Jobs Act (TCJA) and is Trump’s signature initiative for driving private investment into economically distressed communities. The program has been popular with investors, but critics complain that the program often subsidizes investments that would have occurred anyway. The Biden Administration seeks to retain but reform the program as part of his Build Back Better agenda. Biden also proposes to expand the separate New Markets Tax Credit, providing more opportunities for community development groups to invest in lower-income neighborhoods.

Building Sustainability: As part of his $2 trillion infrastructure plan, Biden has set ambitious environmental goals, including upgrading four million buildings, weatherizing two million homes, and constructing 1.5 million sustainable homes and housing units. Specific proposals include tax credits for carbon capture, emission reduction, and restoration of the Energy Investment Tax Credit.

Growth on the forecast

Several leading non-partisan forecasting firms, including Oxford Economics, Moody’s Analytics, and Rabobank have prepared projections comparing growth anticipated under a second Trump Administration versus a new Biden Administration. Each uses different assumptions about what tax and spending proposals are ultimately adopted, but all projections conclude that Biden’s “tax and spend” policies would yield somewhat faster GDP and job growth (and federal debt) than would Trump’s plan that focuses on reducing taxes, spending and regulation.

Forecasts from partisan think-tanks inevitably reach differing conclusions based on their ideological perspectives. But most impartial analysts conclude that if Biden is successful in enacting a substantial share of his policy initiatives, the stimulus effect alone from his increased spending should ensure above-trendline economic and job growth, more than offsetting any potential slowing attributable to expected tax increases and additional regulations. This growth should provide a solid foundation for property demand in the coming years.

Lastly, Biden’s picks for top economic policy jobs can greatly impact how policy initiatives are interpreted and implemented. Most notable is former Fed Chair Janet Yellen for Treasury Secretary. She and Cecilia Rouse, whom Biden will nominate to head the Council of Economic Advisors, are both liberal labor economists, ensuring that the Biden Administration’s economic focus will shift sharply from Trump’s pro-business, Wall Street orientation.

Biden also intends to nominate several other economists whose careers have focused on climate change or equity issues including Neera Tanden to head the Office of Management and Budget; Brian Deese to serve as National Economic Council director; and Heather Marie Boushey and Jared Bernstein to serve with Rouse on the CEA. In a sharp departure from the Trump Administration, no senior officials are drawn directly from the commercial real estate sector.

Property shelters from the storm

Despite higher taxes and greater regulation, the commercial property sector should prosper as the economy emerges from the pandemic and greater government spending promotes economic growth. The impacts of Biden’s economic policies on each property type will vary.

The industrial sector has been the clear property outperformer in recent years and gained more during the pandemic, particularly at the expense of retailing. Industrial stands to benefit from Biden’s potential plans to increase spending on housing, building sustainability, and other forms of infrastructure. Rising trade flows would also support warehouse demand generally, though Biden’s desire to encourage domestic manufacturing could alter the hot locations.

The impact of Biden’s policies on the housing and multifamily markets should also be positive. Biden’s sustainability plan includes financial incentives to weatherize houses and apartment buildings. The Administration’s tilt from Wall Street to Main Street and greater focus on equitable growth should provide more affordable housing opportunities. Population growth might tick up if immigration expands, bolstering housing demand.

The office and retail sectors both face tough transitions coming out of the pandemic. Demand for offices is sure not to revert to its pre-pandemic levels as more employees work from home more often, but the sector should benefit overall from faster economic growth. Similarly, demand for retail space will not return to prior levels for many years. However, retailers and shopping centers that cater to less affluent consumers should benefit from tax policies that protect the tax-home pay of lower-income households while raising taxes on wealthier families. Finally, investor demand for property could take a hit from Biden’s plans to raise taxes on business revenue and wealthier households through higher tax rates and the reduction or elimination of some tax write-offs. 1031 exchanges could be eliminated or sharply reduced. However, Biden is likely to focus on growing the economy before initiating a tax overhaul, so property investors would benefit from improving market conditions before the tax man comes knocking.

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What Will the Incoming Biden Administration Mean for the Mortgage Industry?

As Joe Biden moves into his role as President of the United States, the country as a whole anticipates change, and the mortgage industry is no exception. With all eyes on housing-related legislation emphasized by the Biden/Harris ticket, lenders wonder what a fresh start in the White House will mean for them in the coming months. From economic shifts to policy reforms, mortgage professionals can undoubtedly expect a new industry outlook to accompany the incoming Biden administration.

Rising interest rates

A projected rise in interest rates should come as no surprise. With interest rates at historic lows in the final quarter of 2020, there’s really nowhere to go but up.

The coronavirus vaccine is expected to normalize economic activity in the travel, lodging, and entertainment sectors, which should give lift to the general GDP. At the same time, firming inflation has the potential to lead to higher market-based interest rates. Based on data from the Obama era, analysts suggest that over the next year, interest rates could potentially peak around 3.2% or 3.44% for 30 year FRM on the high or “worst-case” end.

Of course, projections are speculative. Additional COVID strain outbreaks and the unknown recovery time for small businesses in every sector could keep rates lower than expected. However, most industry professionals doubt that we’ll see rates dip below what we’re currently experiencing at the beginning of 2021.

For lenders, rising interest rates could theoretically lead to a decline in new loan generation as the monthly costs of carrying a mortgage rise for borrowers, though the gradual increase doesn’t seem to be enough to realistically deter home purchases. More likely, the consumer push to refinance current mortgages will probably begin to slow down a bit.

Leveling home prices

Fueled by pandemic-driven urban sprawl, the housing market has seen remarkable resiliency and even growth in the past few quarters of 2020. A sellers’ market pushed home prices up, particularly in suburban locales.

But with hope for post-pandemic normalcy in the months to come, the National Association of Realtors (NAR) anticipates more balance in supply and demand, which will inevitably affect home prices. Where the median price is currently $303,000, the NAR projects a slight dip to $297,000 in the first quarter, then a subsequent return to normal growth models.

For mortgage lenders, home pricing is largely tied to appraisals. During his campaign, Biden made broad statements regarding the need for national appraisal standards and additional appraiser training, specifically in the valuation of homes in communities comprised primarily of people of color. As home prices level, appraisals could come under more scrutiny; lenders will do well to remain vigilant about new standards when requesting appraisals in the coming years.

Additional access for borrowers

Housing reform was one of the hallmarks of the Biden campaign and will likely be a priority for the administration. Anticipated new leadership for the Consumer Finance Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) could mean a focused and strategic implementation of Biden’s six principles for housing: affordability, stability, safety, accessibility, efficiency, and proximity.

During his campaign, Biden proposed a $640 billion investment in housing over the next 10 years. One part of that investment includes the initiation of a downpayment tax credit of up to $15,000 for first-time homebuyers. The credit is intended to make it easier for borrowers to jump that initial hurdle of homeownership by offering immediate assistance (rather than waiting until next year’s tax filing).

With the Georgia elections shifting the balance of power in the senate, housing experts consider this tax credit to be more likely to succeed in some measure or another. An additional stimulus package for individuals and small business is also expected. Even if existing home inventory remains low, these incentives could drive contractors to invest more in new builds in order to capitalize on buyers’ increased purchase power. Subsequently, new home sales––and mortgages––could rise in the third and fourth quarters of this year.

Biden also hopes to create a new public credit reporting agency under the CFPB, saying that the three major credit reporting companies are “rife with problems.” The public credit reporting agency would work toward the elimination of racial disparities and account for non-traditional data sources, which could boost credit scores. Better credit scores should, in turn, create better access to mortgages.

Fewer foreclosures

Biden plans to create a Homeowner Bill of Rights modeled after similar legislation enacted by Kamala Harris in 2013 in the state of California. Provisions within the California Homeowner Bill of Rights restrict and regulate foreclosure proceedings and expand the statute of limitations for prosecution of mortgage-related crimes.

A study out of UCLA suggests that anti-foreclosure laws in California not only dramatically decreased the number of foreclosures but also increased housing prices over projections. Analysts say the upward push on pricing results from two sources: 1) a containment of housing panic where foreclosed homes that are “priced-to-sell” depress other home prices in the market and 2) a limiting of the “disamenity effect” where foreclosed homeowners avoid home upkeep and therefore diminish the value of surrounding homes.

Assuming that the Biden administration establishes a national Homeowner Bill of Rights, the mortgage industry can expect more red tape when pursuing foreclosures. Considering that 3.5 million Americans are currently experiencing mortgage forbearance due to the pandemic, this legislation could seriously disrupt the market on two sides of the same coin. While loan recovery becomes more difficult, loan modifications may become more necessary.

Expanded or reinstated legislation

In the months to come, lenders will also want to watch for legislative changes that could affect the loan industry directly or indirectly. The following are some specific pieces of legislation that Biden has mentioned expanding or reinstating.

HFA RISK-SHARING

Biden wishes to reinstate the U.S. Department of Housing and Urban Development’s (HUD) risk-sharing rule, section 542(c). This rule allows HUD to share the risk of mortgages written for multifamily housing projects by state and local housing finance agencies (HFAs) in an effort to provide affordable rental options.

COMMUNITY REINVESTMENT ACT

Biden’s campaign promised an expansion of the Community Reinvestment Act to include not only oversight of banks but also of non-bank lenders and insurance companies. The goal of this expansion is to close loopholes that allow institutions to avoid investing in certain communities.

GOOD NEIGHBOR NEXT DOOR PROGRAM

The Good Neighbor Next Door program offers assistance to first responders, educators, and other public servants who pursue housing in consistently impoverished communities or communities with fewer affordable housing options. Biden wishes to expand this program to offer additional downpayment assistance, increase the pool of qualified homes, and allow for low-interest rehab loans.

MAINTAINED OR INCREASED REGULATION

Historically, Democrats tend to maintain or increase regulation in all markets, so there’s a good chance that the mortgage industry will see some additional government oversight. At this time, many mortgage professionals have eyes on the future of GSEs as well as discrimination litigation.

CONSERVATORSHIP OF GSES

Trump had proposed a boost in capital reserves leading to the eventual re-privatization of Fannie Mae and Freddie Mac. However, Biden has made no reference to these government sponsored enterprises (GSEs). Some interpret the silence to mean that re-privatization is not a priority. Analysts anticipate that Biden will maintain government control of Fannie Mae and Freddie Mac, speculating that he might use GSE profits to fund affordable housing goals rather than focus on capital reserves.

DISCRIMINATORY PRACTICES

Under the Trump administration, discriminatory practice suits within the lending industry were difficult to litigate. A HUD rule established in 2020 required a preponderance of evidence in disparate impact cases, and the CFPB was limited in its ability to enforce settlements against discriminatory mortgages practices. Biden has claimed that his administration will enact regulations designed to protect consumers from discriminatory lending and will make discrimination prosecution easier.

Bottom line

The mortgage industry can expect both economic and regulatory changes as Joe Biden begins his term as President of the United States. Navigating a new industry landscape will require some flexibility from lenders at every level, but with proper support, future changes should be easily accommodated.

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A Look Back at 2020 and Looking Forward to 2021 for the Atlanta Commercial Real Estate Market

2020 was a year of uncertainty and struggle. Back in January few could predict the multiple crises that would make 2020 a year like no other. In early January the CDC issued travel warnings about a strange new virus outbreak in Wuhan, China. By January 21st the first reported US coronavirus case was confirmed in Washington state. Within a week China enforced a full lockdown in Wuhan and President Trump suspended entry into the US from foreign national travelers coming from China.  

During February the world watched as the virus quickly spread and businesses began to brace for the coming economic impact as rising numbers in Asia began to foretell what looked to be a deadly global pandemic on the horizon. By the middle of the month the outbreak was presenting major logistical challenges as ports and supply chains reported delays and stalling production. On February 24th the Dow Jones Industrial Average had its worst day in two years and by the end of the month the US would have its first confirmed death due to effects of COVID-19.

March brought major lockdown announcements in Europe including Italy which was hit particularly hard in the early months of the outbreak. By March 11th the World Health Organization declared that the virus outbreak was now at the level of a global pandemic. In the US grocery stores shelves went empty for items such as toilet paper and hand sanitizer and people began to become familiar with social distancing and preventative measures such as wearing masks in public places and working from home. Many restaurant and retail locations began to close as the case numbers and deaths continued to rise. On March 13th, President Trump declared a national emergency releasing $50 million in aid to buoy a quickly failing economy. Another $2.2 trillion of stimulus money was agreed to on March 27th.

By April unemployment had shot up from 3.8% in February to 14.4%. New York City became the major US hotspot for the virus. By late May it appeared that many of the measures taken to slow the spread were having a positive effect, but then, at the end of month, George Floyd was killed by police in Minneapolis. The gruesome video of the incident went viral and triggered weeks of massive protests nationwide. 

As the summer moved along, coronavirus cases again began to rise. By September 25th the US surpassed 7 million cases. During the final days of the presidential campaign, President Trump himself tested positive for the virus. Trump would end up losing the race for the presidency in a close election to Democrat challenger and former Vice President Joe Biden.

In December the first COVID-19 vaccines were approved and started the rollout process, racing against the continued rise in case numbers to once again return our lives to something akin to normal.  

During these trying times Atlanta has fared better economically than many other US metros, adding back roughly three-quarters of the jobs lost since the start of the pandemic. Atlanta benefited from an economy not dependent on tourism as its industrial base and strategic distribution location buoyed the local economy. Looking forward it is obvious that the commercial real estate market in Atlanta will continue to be affected by the pandemic for the foreseeable future. It is also obvious that the speed of the recovery will vary greatly from sector to sector.

Industrial

Atlants’ industrial market flexed its muscle when it was needed most during the economic turbulence experienced during the pandemic. After an initial knee-jerk reaction slow down for industrial leasing at the onset of the pandemic the Atlanta industrial market picked up steam with leasing volume surging over the last few months. Low vacancy rates and high demand have protected landlords from the falling rents seen in other commercial sectors. Atlanta will continue to benefit from its strategic location and continue to rise as the distribution hub of the south.

Office

Atlanta continues to be an attractive location for big name office tenants landing commitments from the likes of Amazon, Microsoft, Papa Johns and Google over the last year, but slowing rent growth and a rise in subletting has become a burden on the sector’s overall recovery. Atlanta has not been unscathed from the effects of the pandemic but it has clearly outperformed peer US metros and should continue to do so in the future. 

The major threat to the Atlanta office market recovery is an expected increase in supply combined with a trend towards more permanent work from home solutions as many companies have come to the realization that working from home may be a net plus cost wise even after the pandemic has waned. The long term outlook for the Atlanta office remains positive as other metros simply cannot compete with Atlanta’s highly educated workforce and overall affordability.

MultiFamily

Atlanta’s multifamily market closed out the year in strong fashion showing a surprising resilience to the economic downturn caused by the pandemic. Strong demand has allowed for above average rent growth especially in Atlanta’s more affordable suburban markets. Encouraged by these positive signs in the market, investors have returned in full force setting record sales volume numbers in the final quarter of the year.

Retail

Retail, of course, has been the commercial real estate market most affected by the pandemic. Lease terms have shortened and with continued uncertainty surrounding the speed of the vaccine rollout there is still no end in sight for the struggling retail market in Atlanta or the nation as a whole. 

Even with Georgia’s aggressive response to the pandemic, opening the economy fully in May, many restaurants and retailers face an extreme shortfall in expected revenues compared to anything close to a normal year of economic performance.

With the trend towards less consumer spending in brick-and-mortar locations and sit-down restaurants, retail tenants have been reluctant to commit to longer leases. How quickly the US  returns to normal retail consumer behavior is largely dependent on the success of the vaccine rollout. Until then, expect the retail market to continue to suffer. 


We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

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Home Office Tips/Trends

What is key to having a functional home office these days?

While we are working at home more, we want our spaces to be beautiful and functional.

Beautiful storage that looks more like residential furniture than a true office.

Invest in a good office chair that doesn’t look like you brought it home from the office.  There are some great choices that bridge that gap.  Make sure to find an appropriate mix of lighting that should include ambient, task and natural (if possible).

As more people are using laptops, etc.  does this allow for beautiful tables, etc. as desk surfaces?

Yes.  I did a lady’s office that used a settee. It is possible to work from anywhere and sitting on anything that is comfortable and makes you feel good about your surroundings. If you are doing it for a long time day in and day out make sure it is good for you ergonomically.  Many people even prop up in bed to WFH.  Upholstered headboard, good pillows  and lighting, and you’re good to go.

Have you had any queries to convert spaces?  If so, what have you done?

Yes.  Those “extra” spaces or bedrooms that look good but are never used have been replanned to become a beautiful home offices.

For a while there was  trend to having the Command Central tech center in kitchens/mudrooms?    Is that still true or is there another trend you are seeing?

Not so much anymore.  We do see a lot of requests for charging stations in these areas.  But with the need for homework/homeschooling areas, as well as both spouses working from home, it has been more about turning dining rooms into multifunctional areas.  Or that extra bedroom.

Do you have bookcases, etc. in the space?

As needed, yes.  But with so much being on the internet and laptops being so portable, there isn’t the need that there was 5-10 years ago.  It is more about comfort and lighting wherever someone chooses to work.   Bookcases do add character, but aren’t  used in same way.  They may not incorporate collections from travels, photos, etc.

How do you incorporate technology into the space, so it isn’t obvious?

Almost everything is wireless, so we don’t really have that problem.  Printers, routers and the sort are typically concealed in a cabinet or closet, so they are easily tucked away.  Some homes have a room that has all of house systems from security, heating, sound, etc.

From a sound perspective,   do drapes, furniture and carpeting help absorb ambient noise so there is more clarity?

We look to incorporate those solutions in residential projects as a whole, so for the most part these items are already incorporated into the spaces.

I approach home offices the way I do the remainder of any residential project.  Peacefulness and balance are the point of entry.  Not a lot of clutter.  Comfort is king.  And the things needed for functionality at your fingertips.

Tish Mills Kirk of Tish Mills Interiors, a preferred vendor of The Meridian Real Estate Group, is an award-winning interior designer who has been working with clients in their homes for more than two decades. She believes that it is essential to put together a cohesive plan for your home renovation before you get started that can be carried out by the team of experts you assemble. www.harmoniousliving.net

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Beth Dempsey
Images & Details, Inc.
203.962.3235
[email protected]
 Photos provided by Chris Little.


FILING FOR HOMESTEAD EXEMPTION IN 2021

If you are filing for homestead exemption, homeowners may need to provide their Warranty Deed book and page, proof of residence, social security numbers, driver’s license, and car tag info. In most counties, to be eligible for the current year, you must have owned and occupied the property as of January 1st.  If the property is located within city limits, the homeowner may be required to file with the city as well.

Cherokee County – deadline is April 1, 2021 678-493-6120
http://www.cherokeega.com/Tax-Assessors-Office/homestead-exemptions/

Clayton County – deadline is April 1, 2021 770-477-3311
http://www.claytoncountyga.gov/government/tax-commissioner/exemptions

Cobb County – deadline is April 1, 2021 770-528-8600
http://www.cobbtax.org/property/exemptions

DeKalb County – deadline is April 1, 2021 404-298-4000
https://dekalbtax.org/file-homestead-exemption

Douglas County – deadline is April 1, 2021 770-920-7272
http://www.celebratedouglascounty.com/340/Exemptions

Fayette County – deadline is April 1, 2021 770-461-3652
http://www.fayettecountytaxcomm.com/subpages/Exemptions.asp

Forsyth County – deadline is April 1, 2021 770-781-2106
http://www.forsythco.com/Departments-Offices/Board-of-Assessors/Homestead-Exemption

Fulton County – deadline is April 1, 2021 404-612-6440
http://www.fultonassessor.org/exemptions/

Gwinnett County – deadline is April 1, 2021 770-822-8800
https://gwinnetttaxcommissioner.publicaccessnow.com/HomesteadExemptionApplication.aspx

Henry County – deadline is April 1, 2021 770-288-8180
https://www.henrytc.org/#/property

Paulding County – deadline is April 1, 2021 770-443-7581
http://www.paulding.gov/index.aspx?NID=89

This information was provided by one of our preferred closing attorneys Neel, Robinson, & Stafford, LLC. All rights reserved. NRS has multiple offices to choose from including Glenridge, Buckhead, West Cobb, Inman Park, Alpharetta, and Acworth.

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2021 Opens With A New Record Low For Mortgage Rates

The average 30-year mortgage hit an all-time low of 2.65% this week, according to data from Freddie Mac released Thursday.

Despite predictions that mortgage rates would slowly tick back up in 2021, the new year opened this week with the same old story: mortgage rates hitting a new record low.

The average rate for the 30-year fixed-rate mortgage fell to 2.65 percent for the week ending January 7, the lowest number ever recorded by Freddie Mac since the government-sponsored enterprise began tracking weekly rate fluctuations in 1971.

But despite the drop, housing affordability has continued to decrease.

“A new year, a new record low mortgage rate,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices.”

The forces behind plummeting rates are also starting to shift, according to Khater, so economists shouldn’t abandon the position that rates will climb in 2021 after one contrary week.

“The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential home buyers during the spring home sales season,” Khater said.

The 30-year fixed-rate mortgage averaged 2.67 percent last week and was 3.64 percent a year ago at this time, which means it’s dropped nearly an entire percentage point year over year.

The 15-year fixed-rate mortgage averaged 2.16 percent for the week ending January 7, down from 3.07 percent a year ago. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.75 percent for the week, down from last year’s average of 3.30 percent for the same week.

Mortgage purchases are still higher than this point last year, but slowing the rate of increase considerably. The unadjusted purchase index — published weekly by the Mortgage Bankers Association — was down 30 percent compared with two weeks earlier, but up 3 percent year over year for the week ending January 6.

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