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Yes. America’s Housing Market Is Officially Over-Heating Everywhere. How Long Can It Last?



Hispanic woman looking at real estate sign

As recently as just a few years ago, it used to be that the hardest part about buying a house for most people was going through the financial colonoscopy of getting approved for a mortgage.  

Now, that’s the least of buyers’ worries. In virtually every American city right now, many single-family homes hitting the market are selling in bidding wars and the buyer with the most cash who closes fastest wins.

To some extent, people like me are part of the problem.

I frequently write on real estate markets around the country, often assembling raw data from sources like Zillow,, and Redfin, while also interviewing leading economists and experts. Which begs the question of whether I’m feeding into the froth by validating it.

By the numbers, however, it’s becoming harder and harder to argue that America’s housing market isn’t already over-heating. Inventory in many regions has hit record lows. Days on market are now often hours. Home prices are up 15.8% on average year-over-year across the country according to a recent National Association of Realtors’ report (in some places like Park City, UT they’ve almost doubled). And in markets like Miami, Sacramento, Boise and Nashville contractual absurdities like waiving all contingencies are now standard conditions as panicked buyers over-reach to get in on the action before the current boom decelerates.  

There are reasons for all of this beyond the pandemic. Home building since the end of the Great Recession hasn’t kept up with population growth, while tens of millions of Millennials simultaneously have recently come of first home-buying age, creating a nationwide generational housing supply shortage that’s been deepening for years (which a ton of “experts”, policymakers, and lenders like Freddie Mac long saw coming).

On the demand side, a dozen years of bullish fiscal policy have just added more combustion to the fire. Mortgage interest rates have stayed at record lows through three successive Presidential Administrations, as the Dow Jones, NASDAQ, and S&P 5000 have nearly tripled during the same period. According to the Mortgage Bankers’ Association, 2.5 million mortgages, or 5.1%, also are still in forbearance, as wealthy buyers continue to snatch up second and third homes (or more) as investments. This has created a “shadow inventory” of millions of homes that never hit the market because it makes more financial sense for owners to hold than sell as long as prices continue to outpace carrying costs (which in most market cases they still do).  

Then, there are other externalizing factors that don’t get the headlines but are also moving the needle, like technology—including online listing platforms, digital mortgage approvals, and virtual closings—which has fast-forwarded the speed at which homes are marketed and sold, particularly during the recent pandemic, in turn artificially hastening the pace at which demand is outstripping supply.  

That this is all happening has been widely covered in the news since the residential real estate market first started to get frothy after COVID hit.

The last time America’s housing industry looked like this, however, the Great Recession followed, concurrent with plummeting property values, widespread foreclosures, and the loss of trillions of dollars of Americans’ equity and retirement savings. This time around, the underlying supply and demand fundamentals might be different in part due the pandemic, but the panic-buying and irrational exuberance looks a lot like it did fifteen years ago (when I bought my first house in a bidding war at a 9.9% interest rate over ask).  

Yet, what no one seems to be talking about now is whether America’s housing market is already officially in the bubble zone? And if it bursts, what happens next on the backside of a fragile post-pandemic economic recovery?

“A real estate bubble occurs when home prices escalate beyond what can explained by the fundamentals, like mortgage rates, population growth, or household income growth,” explains Taylor Farr, Lead Economist for real estate website Redfin, “When expectations of price increases become the driver of price increases themselves instead of fundamentals that creates its own feedback loop. Robert Shiller said it best: ‘A bubble is a kind of social epidemic—a period of feedback where price increases generate enthusiasm among investors, who then bid up prices more, and then it feeds back again and again until prices get too high’.”

So does the current national housing market meet the definition of a “bubble”? And more importantly, are buyers getting in on the current housing gold rush at this point over-paying and risking being trapped in another real estate valuation crash?

According to Redfin’s Marr, not quite yet—which is good news for still prospective homebuyers as well as for the overall economy since housing and its side industries like home renovation and improvement account for an average of 15%-18% of U.S. annual GDP according to the National Association Of Home Builders.   

“The current market doesn’t meet the definition of a bubble yet,” says Marr, “At least not nationally or in most places. According to the Case-Shiller index, home prices grew more than 11% in January from one year earlier, which is definitely more than wages increased, but that’s not the whole picture. Mortgage rates fell 88 basis points during this year as well from 3.62% in January 2020 to 2.74% in January 2021 per Freddie Mac. This drop in mortgage rates almost completely offsets the rise in home prices according to a recent analysis by the Fed. Additionally, most households received stimulus checks and pulled back spending money on things like travel, eating out, and gyms during the pandemic and instead opted to spend more money on housing, which gave a short-term boost to prices as well.”

Translation: the fundamentals of the current housing boom are relatively, structurally sound even in markets where prices ostensibly seem like they’re spiraling out of control because in many cities like Boise, Fort Lauderdale, Sacramento, and Columbus, OH housing was already relatively affordable in the first place.

Demographics are also helping, says Farr, not only because more and more Millennials are poised to enter the homebuying market, but also because many of them can now work from home, which means millions of prospective new homebuyers will likely continue to seek bigger spaces, lower-density, and more privacy no matter what percentage of the world gets vaccinated.

“Current demographics are very favorable to a sustained housing boom, especially in the wake of the pandemic, as more Millennial households enter into prime homebuying age and start families. More and more households are also demanding more space as they work from home more frequently and invest more in things like home offices and gyms. Finally, homebuilding is still playing catch up as housing supply remains tight from homeowners refinancing and staying put in their homes longer. All of these factors aren’t going anywhere in my opinion any time soon.”

As for what happens next, the first—and best case—scenario is absolutely nothing.

A decade ago, countless well-heeled, economic prognosticators didn’t think that the Dow Jones would ever break 30,000 and stay there or that oil could drop below $50/barrel for years. So it’s entirely possible that home values will continue to appreciate and provide millions of Americans with billions of dollars of found money as long as a supply shortage persists and more and more Millennials and Gen Zers have families and amass the financial resources to buy into the American Dream.

Despite the fact that wages long ago stopped keeping pace with the cost of housing, most younger, first-time homebuyers also have locked themselves into conventional loans at historically low interest rates without ballooning adjustable mortgages (unlike I did back in 2005), and buyers paying cash won’t have issues paying off mortgages or risk defaulting on their properties in the first place.  

All of which means that even if America’s housing market keeps breaking its own records in the short term, says Redfin’s Farr, it’s also fueled this time around by factors far different than the bubble that preceded the mortgage backed securities crash of 2008.

“The key difference now versus during the housing bubble before the Great Recession is that back then it was easy credit that fueled speculation, not cheap credit,” says Marr. “It wasn’t uncommon for buyers to put nothing down and speculate on real estate because all they had to do was fill out a few pieces of paper and no one cared about the actual numbers. This time around the demand that’s fueling appreciating prices is real—from families, newly remote workers, and companies relocating employees to lower tax, lower regulation states.”

Short of a broad market crash (or “re-pricing” as housing economists like to call it), the more immediate issue when it comes to the post-pandemic recovery is affordability. As housing values have soared recently, millions of Americans, particularly middle class, first-time home buyers, have been priced out.  

As a result, even the apartment market is getting tight as more and more renters who wanted to buy before the pandemic have had to stay put and homeowners who’ve recently sold to take advantage of their equity can’t buy up and have no other place to live. In most cities in America with the exception of San Francisco and Manhattan (which were already over-priced in the first place), apartment rental rates already are trending back up from their 2020 lows and vacancy rates have dropped into the single-digits.

Which begs the more important in the longer term: if not a crash, what’s going to put the breaks on the current housing boom? And is there a path to deceleration that doesn’t send another decade of shockwaves through the economy like it did during the Great Recession?

“Prices can’t keep going up forever,” says Redfin’s Farr, “Even when the fundamentals are sustainable like they are now. Strong increases in mortgage rates, which are likely coming soon, will inevitably cool home appreciation and bring prices back in line with wages.”

Compared with 2008 that’s great news for everyone whether you currently own a home or not.

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Real Estate

Producer’s Compound In San Miguel De Allende Is A ‘Catch’ At $6.25 Million



thom beers deadliest catch producer san miguel de allende custom compound hacienda

If old town charm, modern luxury and outdoor living spaces are high on your wishlist, the vibrant home of “Deadliest Catch” and “Storage Wars” producer Thom Beers in the inland Mexican state of Guanajuato checks all the boxes.

Set along a cobblestone street two blocks off the central plaza of the colonial-era city of San Miguel de Allende, the three-time Emmy-winner’s fully furnished compound blends artistry with comfort.

Called Casa Tres Cervezas, the turnkey property features two courtyards, plus rooftop and patio areas, that make the most of the temperate climate with indoor-outdoor living. Views take in the pink “wedding cake” towers of the neo-Gothic Parroquia de San Miguel Arcángel as well as other church spires.

“The rooftop garden has a remarkable direct perspective of the churches that transports you into another time and space,” said Joseph Lown of CDR San Miguel, who is co-listing the property with fellow agent Eduardo Mora.

A heated swimming pool and spa sit in one of the courtyards, which connects to a yoga studio and a full bathroom with a changing area. Hand-carved stone walls and columns bearing botanical motifs surround outdoor spaces framed by plantings.

A lanai courtyard across from the living-dining room, bar and kitchen includes a shaded loggia with a lounging area and an in-ground fire pit. The rooftop deck contains an outdoor kitchen.

The grand entry opens into a living room with a stone fireplace and large skylight. The domed and arched boveda ceilings are made of brick. Metal and glass lighting fixtures, ironwork and concrete Mexican tile are among other details throughout the more than 11,000 square feet of living space.

Lown said the level of craftsmanship reflects Beers’ appreciation of the vibrant community, roughly 10% of which is made up of expats. To create the compound, the producer pieced together five parcels of land and sourced artisans from all across Mexico to update the property while keeping it entirely authentic.

“Rarely do you find someone so in love with the Mexican culture that they are willing to work with an architect to keenly preserve and enhance a property such as this,” Lown said. “[Beers] sourced the best artisans from across Mexico to do the stonework, carvings, glass etchings, metalwork and even some of the home’s paintings.”

The attention to detail is further evidenced in the formal dining room, which pairs rustic stonework with a fireplace, cantina-style bar and floor-to-ceiling windows.

The stone-walled kitchen is large enough to accommodate a table for eight. A seating nook with a fireplace anchors one corner of the room.

Among the nine bedrooms is a suite with a loft. Another room has a skylight view of the koi pond for a total of nine bedrooms and nine bathrooms—and those are just the main living areas.

“There’s even a recording room with soundproof walls that doubles as an Xbox lounge,” Lown said.

The $6.25-million asking price includes a separate adjoining property consisting of a garage, a ground-floor restaurant space, some rustic apartments and a garden area—though most aspects can be negotiated separately. 

Suppose the owner is open to offering the property as a short-term vacation rental. In that case, the income produced is capable of paying for the carrying costs of the house, maintenance, utilities and staff fees, according to Lown.

Private parking is another added bonus. “Parking in the city center of any colonial town is golden,” Lown said.

The Baroque Spanish architecture, cultural festivals and an active arts scene are among the attractions of San Miguel de Allende, which draws tourists and expats from around the world. The town’s historic core is designated as a UNESCO World Heritage site, requiring structures to retain their historic appearance. Homes painted in a palette of mustard yellows, red and orange hues line the narrow streets.

The nearest international airports are Del Bajío International Airport in Guanajuato, about 58 miles to the west, direct flights to Los Angeles, and Querétaro Intercontinental Airport, some 56 miles away in Querétaro. San Miguel de Allende is about 150 miles north of Mexico City.

CDR San Miguel is an exclusive member of Forbes Global Properties, a consumer marketplace and membership network of elite brokerages selling the world’s most luxurious homes.

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Real Estate

Julian Lennon Discusses Art As A Calling Upon Launch Of Partnership With Aston Martin Residences



Julian Lennon, John Lennon, Julian Lennon photography

“I know how it feels to have your privacy invaded by photographers, whether it is in work mode or privately. So I have always been sensitive to that,” says Julian Lennon, describing the philosophy that has driven his decades-long career in photography. “I’m a fly on the wall. Nothing is staged. I don’t want to be in [the subject’s] way.” 

Lennon has just launched a virtual exhibit called “Vision” in partnership with Aston Martin Residences, the 391-unit condo building in Miami and first residential project for the luxury carmaker. Now 70% sold, the building made news for its $50 million triplex penthouse, which comes with a hard-to-find Aston Martin Vulcan valued at over $3 million.

“It is every young English boy’s dream to not only be James Bond, but…Aston Martin…are you kidding me?” says Lennon. “As a kid I used to have the little matchbox Aston Martin. So how can I not be happy for the relationship?” 

The partnership with Lennon came about after a serendipitous meeting between Lennon and reps for the building at Miami’s annual Art Basel festival. Since The Residences borrows design themes from the original aesthetic of Aston Martin cars, and there are echoes of the same level of artistry in Lennon’s photography, the amenity program organizers invited Lennon to be the inaugural artist on the program.

“That’s why we called the exhibit Vision,” said Lennon. “It’s all about design and angles. In many respects a lot of people can tell the shots that I do because of the angle I take. There’s always a little bit of an angle or an edge or something different. Otherwise anybody could take the shot. You have to define that it’s your work.” 

While the building is still under construction the team has created an online immersive exhibit to showcase what will be one of the building’s high-end amenities—a private art gallery for residents. The complete collection launched yesterday and can be accessed here, though organizers for the gallery have provided a few images and an early interview with Lennon exclusively for Forbes readers. The wide-ranging exhibit consists of everything from the artist’s celebrity photos to shots of his travels of far-flung places around the globe.

As the eldest son of John Lennon, Julian Lennon has sought to define his own artistic path. “Whether that’s been through the charitable efforts for the foundation, children’s books, the independent films I’ve been part of executive producing—that’s been my thing. Just creating a relatively large body of work on so many levels.”

His foundation largely supports environmental causes and the needs of preserving indigenous populations. Named The White Feather Foundation, after the shiver-inducing moment when—having been told as a child by his father that if he ever passed away he would send him a white feather to let him know he was alright—Julian was touring in Australia in support of one of his albums and was presented with a white feather by an Aborigine tribal elder in Australia who said, “You have a voice, can you help us?”

“On all those mediums that I’ve been involved with I’ve done my graft on these things,” says Lennon. “If I become more recognizable because of certain pursuits, then it’s not because I’m John’s son or this and that. It’s because I’ve been there doing the work.”

When it comes to photography, Lennon explains he relies almost exclusively on natural light and taking all the time needed to work on the photo in post-production. He says of photographing Charlene Wittstock the morning of her wedding to Prince Albert of Monaco:

“She’s not only got the hairdresser, but the hairdresser’s assistant, the makeup artist, the makeup artist’s assistant. Then the tailor, the tailor’s assistant, and the assistant who is steaming things on the side. All in this tiny little room. I was literally being pushed by all the assistants and have never been in a situation like that so I was really panicking. And I’m going, ‘what am I going to?’ She says, “Jules, I think this is making me feel too anxious I don’t think we can do this.’ I said, “Charlene, this is a moment in history. This is ten minutes before you’re becoming a princess.”

Lennon was able to get a few shots but didn’t think any of them matched the importance of the occasion. “So I desaturated [the colors in one] picture and I got goosebumps. It just took me back to a time and an age.” He applied the same effects to the rest of the photos and was able to create a collection that captured the momentous nature of the event. “It truly reminded me of Princess Grace of Monaco.”

Lennon has also just released to the public an extensive collection from his time in Havana, Cuba and several of the images from his collection are on display in the “Vision” exhibit.

As he describes, “I fell in love with the place. It was relatively untouched. You can just imagine harkening back forty, fifty years and feeling what that may have been like. It was captured in time and it still remains relatively as it was. There’s a certain absolute beauty about it. You saw the poverty there and the sadness. You can see a lot of sadness in their eyes but they make the best out of the worst. There’s a lot of happiness within. That’s one of the things that I try and parlay through the photography.”

Here are a few more pictures from the exhibit:

A spontaneous trip to Colombia where a friend had set up an art gallery led to photos such as the street mural above.

The above photo was taken during a songwriting session by U2.

The above photo is of singer Tony Mortimer for the artwork in support of his album, “Songs From The Suitcase.”

For more pictures, the 3D immersive exhibit can be found here, along with an explanation from Lennon about the story behind each photo. For more of Lennon’s photography, complete with several just-launched collections, head to his personal website: For more information on Aston Martin Residences, go to their website here.

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Real Estate

Costs, Timelines And Steps You Can Take



Gavel and Small Model House on Wooden Table.

Cofounder of InstaLend, a non-bank real estate lender providing loans on single-family and multi-family properties for acquisition and rehab.

With the moratorium on foreclosures likely coming to an end soon and millions of Americans still out of the workforce and unable to make their rent or mortgage payments, we may be in for a huge uptick in foreclosure activity nationwide. As a property owner, you may find yourself falling behind on payments to your lender and subject to foreclosure action. Should that be the case, it is critical you have a good understanding of the foreclosure process, timelines and costs.

A foreclosure occurs when a mortgage obligation cannot be financially fulfilled and the lender files a lawsuit against the property owner. The process culminates when the lender sells the property at an auction to recoup the money it is owed.

Property owners usually find themselves in foreclosure as a result of nonpayment of the mortgage obligation. Common reasons that force a property owner to default on their payment obligations to a lender are unemployment, extreme debt, relocation and divorce.

Types Of Foreclosures And Their Processes

A foreclosure can take anywhere from a couple of months to several years, depending on state laws and whether it is a judicial or non-judicial foreclosure. 

In a judicial foreclosure, the lender fails to reach a settlement with the property owner and files a lawsuit against the property and its owner. Therefore, judicial foreclosures require the lender to file a complaint, serve the defendant and go through a court motion to eventually get the title (ownership) of the property. This process can last a few months, or it may take several years. States including New York, New Jersey and Illinois have judicial foreclosure laws.

On the other hand, in a non-judicial foreclosure, the lender is not required to file a lawsuit against the property or its owner. Rather, the lender pursues a foreclosure with the help of a third-party trustee, a process that can vary greatly from state to state. Non-judicial foreclosures can be completed in a matter of a few months since they do not require the lender to go through a court process to get the title (ownership) of the property. States such as Alabama and Georgia have non-judicial foreclosure laws.

Once the lender has completed the foreclosure process, the property will be placed for sale at a public auction. Typically, a notice of sale will be published in a newspaper and advertised by a firm of auction organizers.

After Foreclosure: What Happens Next?

The lender is now the owner of the property. Such a property is referred to as REO, or “real estate owned” by a lender. Consequently, the lender may then hire a real estate agent to get the property sold. Being its owner, the lender is now also responsible for the upkeep of the property and must ensure that the property taxes and utility bills are paid.

In addition, the lender must also ensure that the property is kept secured so that no one can break into it. At this point, lenders might seek out experienced and licensed contractors to secure and maintain the property. To secure the property, the contractor must change all locks to the property and seal the windows. Meanwhile, a real estate agent will list the property on the MLS so that the property is visible to all buyers via sites like Zillow and Trulia.

Steps To Take During Foreclosure

Being subject to foreclosure action can be extremely stressful and unpleasant. As a property owner, should you find yourself exposed to foreclosure action, it would be worthwhile to reach out to your lender and transparently share with them your financial difficulties. Do not ignore any communication from your lender and be sure to speak with a foreclosure defense attorney to understand your rights. Understand that since foreclosure action is expensive and time-consuming for your lender as well, they may be willing to settle the matter on reasonable financial terms. Inquire with your lender if they would offer loan modification or a payment plan to resolve the matter. Should none of these avenues prove successful, consider offering a deed in lieu of foreclosure to your lender so you may resolve the matter and eliminate personal liability for any deficiency in loan balance.

With the anticipated rise in foreclosures for 2021, it is imperative that property owners and lenders understand how the process works, the costs and the timelines involved.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?

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