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The New Way to Save for a Down Payment

April 04, 2023

Rise and shine! It's a new day and The Shaker is here to serve you the best mix of residential real estate news. Yummy yummy.

THE BIG SPLASH

The New Way to Save for a Down Payment

Rocket Companies, the parent company of mortgage lender Rocket Mortgage, has launched a new credit card, the Rocket Visa Signature Card. It offers cardholders the opportunity to earn 5X points on all purchases, which can be redeemed against closing costs and down payments on a home with Rocket Mortgage or against the mortgage principal balance. 

  • The card also offers a welcome bonus of $200 if the cardholder spends $3,000 within the first three months of having the card. 

  • However, the card comes with an annual fee of $95, which is waived for cardholders who already have a mortgage loan serviced by Rocket Mortgage. 

  • The card also offers several Visa Signature benefits, including extended warranty protection, porch piracy protection and cell phone protection. 

  • While the rewards rate is good, the article cautions that the card may not be the best option for hopeful homebuyers as it ties them to one lender early on in the process, and different lenders offer different mortgage loans and interest rates.

A SCOOP OF MARKET DATA

Manhattan Sales Slump 38% But Cash Deals Set Record

The Manhattan real estate market has taken a hit as sales dropped 38% in the first quarter, with prices also experiencing a fall of 5% on average and 10% on the median. 

  • According to a report from Douglas Elliman and Miller Samuel, the total sales volume was $4.4 billion in the quarter, with 2,242 apartments and townhouses sold. 

  • The slowdown follows a 29% decline in the previous quarter, and it remains uncertain where the new "bottom" will be in Manhattan. 

  • The biggest challenge for buyers and sellers is the gap between their price expectations. 

  • Sellers have trimmed prices, but not enough for the bargain-hunting buyers of today, who still fear overpaying. However, bidding and interest remained especially strong at the high end, and three-quarters of all sales over $5 million were all cash. 

  • Brokers say they are seeing signs that the second quarter will be stronger, especially for the higher-end market. The uncertainty of the future of interest rates and the economy could still impact the market, with the performance of the stock market also playing a role in shaping Manhattan's housing market in the coming months.

A SCOOP OF WITHDRAWALS

Blackstone's Real Estate Fund Breit Sees $4.5 Billion in Withdrawals

Blackstone Real Estate Income Trust (Breit) has faced $4.5bn in withdrawal requests from clients, despite efforts by the company’s executives to showcase investment opportunities in the real estate sector at a conference in March. 

  • The redemptions were up 15% in March and marked the fifth consecutive month that the group limited redemptions. 

  • This suggests investor concerns remain high, even after Blackstone president Jonathan Gray and other top executives held a conference on new investment opportunities arising from the growing financial upheaval in the US. 

  • Breit launched in 2017, allowing wealthy individuals to invest in real estate. The fund's terms allow clients to redeem 2% of their net assets each month, with a maximum of 5% each calendar quarter. However, investors can only withdraw $50,000 per month.

  • Many investors remain confident in the fund, seeing it as a way to increase cash flows longer term and own high-quality assets. However, non-US investors have halved their exposure to Breit in the past year.

A SCOOP OF IDEAS

Empty Offices to Apartments: Denver's Housing Solution?

Denver is considering converting underused office buildings into apartments or condos in an effort to address the city's housing shortfall and revitalize the downtown area. 

  • The Covid-19 pandemic has caused vacancy rates to soar and mortgage loans to go into default, and Denver has struggled with some of the biggest home price and rent gains seen in any city outside of California. 

  • Denver is spending $75,000 for a feasibility study to look at reusing up to 30 buildings downtown, primarily underperforming office buildings. For property owners who have self-identified conversion candidates, the city has created a pilot program to provide them with dedicated one-on-one staff support to get them through the process.

  • Denver's mayoral candidates, as well as Mayor Michael Hancock's administration, have emphasized adaptive reuse in their campaigns. Critics argue that only a small percentage of the city's vacant office space can be converted, given the costs involved. 

  • However, supporters hope that adaptive reuse will create more affordable housing and make downtown more vibrant, more affordable and more competitive for jobs.

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