U.S. Housing Market: A Tale of Two Forecasts

January 30, 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.

What you should know:

Goldman Sachs downgraded its outlook for the US housing market from November call of 4.1% drop to 6.1% drop in 2023.
In a recent paper, Goldman Sachs revised its outlook to a 2.6% drop in national home prices in 2023.
The revision is based on improved prospects for the US housing market and increase in home sales and mortgage purchase applications.
The revised forecast expects prices to be 6% below the June 2022 peak, compared to the previous prediction of a 10% peak-to-trough decline.
Out of 29 leading housing researchers, 5 predict growth or flat prices, while 24 predict further fall in US home prices.

The Mortgage Note 101: What You Need to Know

A mortgage note is a legal agreement between the borrower and the lender that outlines the terms of the home loan.
The note includes the amount of the loan, the monthly payment, the interest rate, and the consequences for defaulting on the loan.
A mortgage note is not the same as a mortgage, but it is the document signed at closing that legally obligates the borrower to repay the mortgage.
The lender originates the mortgage note, but it may be sold in the secondary mortgage market to Fannie Mae or Freddie Mac.
A mortgage note is important because it outlines the borrower's responsibilities and obligations regarding the loan. If the loan goes into default, the full balance becomes due and the lender may foreclose on the property.

Real estate agents are experimenting with OpenAI's chatbot tool ChatGPT, which can generate elaborate responses to user prompts.
ChatGPT can perform various tasks for real estate agents, from writing listings and social media posts to drafting legal documents and answering frequently asked questions.
Some real estate agents are impressed with ChatGPT and can no longer imagine working without it, saying it saves them time and increases their productivity.
Some are even willing to pay for the tool, despite it being currently free.
There are some limitations to ChatGPT, but its ability to assist real estate agents in their work has generated discussions about its potential to disrupt various industries.

A bill has been introduced in the State House that may give cities the authority to implement rent control measures.
Data from the Apartment Association of Metro Denver shows a 12% increase in rent in just the past year, and 88% increase in the last decade.
Rent has increased significantly in other areas of Colorado as well, with double-digit spikes seen in Aurora, Boulder, and Fort Collins.
With many people feeling the effects of the steep rent hikes, the question of why there isn't rent control in Colorado is being raised.
A state law from decades ago prohibits local governments from enacting rent caps, but the prohibition is being proposed again due to renewed focus on addressing the housing crisis.

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