HOUSINGNEWS REPORT
HOW TO RECESSION-PROOF YOUR REAL ESTATE BUSINESS
RENTS NOT AS DOWN IN RECESSION
OwnAmerica’s Rand said the investor segment his company operates in — single family rentals (SFR) — will benefit even if home prices do take a hit. “Remember that SFR is different than housing overall. When the market is strong, investors and consumers are confident and prices rise. Investors win on appreciation,” he explained. “When the market is weak, homeownership declines and renter demand increases. Investors win on yield. SFR is a two-sided coin because every house has two uses: owner- occupied or tenant-occupied/investor owned. No other commercial asset class gives owners two demand drivers and two exit strategies. “Some people will say I view this through rose-colored glasses,” Rand added. “They are welcome to duck and cover for the impending recession. We intend to put the pedal down and gain market share.” Settlement Services: Recession- Proofing Required The settlement services industry is not well-positioned to weather a recession, according to WFG’s Stone. “The impact on WFG, and the settlement services industry in general will be a shrinking market with fewer available transactions and clients more focused on two basic concerns: cost and the quality of service,” he said, noting that he does agree with Norris and others that the larger real estate market will not be as negatively impacted as it was during the last recession. “However, the recession will accelerate the consolidation
MEDIAN HOME PRICE FOR SINGLE FAMILY HOMES AND CONDOS
AVERAGE HUD FAIR MARKET RENT FOR 3-BEDROOM PROPERTY
$1,200
$300,000
$1,000
$250,000
$800
$200,000
$600
$150,000
$400
$100,000
$200
$50,000
$0
$0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
SOURCES: HUD, ATOTM DATA SOLUTIONS
“Some people will say I view this through rose-colored glasses. They are welcome to duck and cover for the impending recession. We intend to put the pedal down and gain market share.”
GREG RAND CEO, OWNAMERICA
trend that has already started in the settlement industry.”
Finishing these three initiatives will allow for WFG to consolidate order entry and post-closing functions, maximize production efficiencies and eliminate as much rekeying of data as possible.” But Stone doesn’t see evidence that others in the industry are as aggressively recession-proofing their businesses.
To prepare for that consolidation trend, WFG is actively implementing three specific initiatives to increase efficiency, according to Stone. “WFG has accelerated its efforts to finish migration to a single operating platform, consolidation of its title production capabilities and implementation of its integration platform (WESTVM) with as many lenders as possible,” he said. “
“For the most part, it doesn’t appear that most of the industry has done
6
SEP 2018 | ATTOM DATA SOLUTIONS
Made with FlippingBook Online newsletter