Inside Real Estate - November 7th, 2019

Inside Real Estate (Nov 7th, 2019)

AI to expedite mortgages / TBT: 'Silence of the Lambs' house /California median home price hits $600K

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1. Las Vegas City Council approved a directive Wednesday that makes it illegal to sleep or camp out in public areas downtown or in residential communities. Those in violation of the ordinance could face a fine of up to $1,000 or six months in jail. The controversial measure drew criticism from people who said this would place homeless people in a cycle of imprisonment. City officials countered those arguments saying that encampments pose safety and health risks. - LAS VEGAS REVIEW JOURNAL

2. San Francisco-based startup Snapdocs Inc. has raised $25 million to improve its artificial intelligence technology. The company offers software that facilitates the mortgage process by reducing paperwork and by connecting all parties involved in transactions. This is supposed to help borrowers obtain mortgage approvals faster. It uses AI technology to help identify any potential mistakes in the documents, which each vary by state and lender. Snapdocs — which processes 750,000 closings annually — charges transaction fees in addition to the licensing of its software. This Series B round comes courtesy of F-Prime Capital, which has previously invested in other real-estate sector startups. - WALL STREET JOURNAL

3. Throwback Thursday: Remember the “Silence of the Lambs” house that sat on the market for a year? It finally sold in July 2016 with a huge price cut. While some Realtors might ordinarily tout that their listing was used in a classic Hollywood hit, this particular residence about 60 miles south of Pittsburgh in Fayette County, Pennsylvania, might be the exception: it was used as the fictional backdrop for Jame “Buffalo Bill” Gumb’s basement dungeon and the infamous line, "It puts the lotion in the basket.” Scarier than that still, some outlets pointed out, was that it was just priced too high. It sold for $195,000 after being listed at $300,000. - PITTSBURGH TRIBUNE-REVIEW

4. The housing crisis in California has driven its median home price to $600,000, which is more than twice the U.S. level. According to a Bloomberg report, California is home to 12 percent of the nation’s population and a quarter of those residents are homeless people. Poor governance, including outdated zoning laws and tax provisions that reward longtime residents to the detriment of newcomers, is to blame, the report found. Management consulting firm McKinsey & Co. finds that California needs roughly 3.5 million more homes by the middle of 2020. California is also the state with some of the nation's priciest neighborhoods: Silicon Valley, San Francisco, Orange County and San Diego. Los Angeles also claims the No. 77 spot on the list. - BLOOMBERG

6. Mortgage applications flatlined for the second consecutive week despite lower mortgage rates, according to the Mortgage Bankers Association. Volume was 60 percent higher one week ago today despite 2018's higher rates. Mortgage applications for refinancing saw a 144-percent year-over-year spike, which was up by 2 percent month-over-month. Experts explain that homebuyers were less active because of a national home-inventory shortage in the most popular home-buying sector: “Amidst persistent supply constraints in the entry-level price range, there’s evidence that high-end home buyers are more active this fall,” associate vice president of economic and industry forecasting Joel Kan said. - CNBC 

5. A forthcoming 125-house, $30 million Dallas residential community — Legacy at McKinney — follows a nationwide trend of single-family rental-home development. In addition to buying houses to be used as rentals, investors are building new neighborhoods from the ground up that are intended to house tenants instead of owners. Scottsdale-based Hanson Equity Partners, which is behind this upcoming subdivision, has four other similar projects across the U.S. Experts claim that this type of construction is in high demand, since not everyone can afford to buy but many prefer to live in single-family houses rather than apartments. - DALLAS MORNING NEWS

7. Veteran Boston-area landlord Peter Shapiro says that renters can save money by opting to pay utilities apart from rent, asking for discounts on long-term leases and avoiding application fees by finding an apartment through landlords — since only agents can charge fees. He also explains that it’s important to develop a good tenant-landlord relationship at the start of the lease, since good communication can prevent costly repairs if issues are reported early on. He explains that long-term lease agreements are favorable for landlords because it decreases turnover costs and reduces the amount of time a home is vacant. Boston boasts among the nation's highest rental rates. - WCVB

8. The Florida home of disgraced political consultant Paul Manafort is up for rent at $14,000 per month after he sold it to his wife for $10. In August 2018, Manafort was convicted on eight felony counts of bank and tax fraud. While part of his plea deal included forfeiting various residential properties in his portfolio, a homestead exception allowed him to keep his Palm Beach Gardens, Florida, house. Manafort sold it to his wife at the nominal fee of $10 so that its property deed could be transferred to her while he was imprisoned. The transaction reportedly took place at the Virginia prison in which he’s incarcerated. The former campaign chairman for President Trump and his wife, Kathleen, purchased the 4,034-square-foot property for $1.5 million in 2007. It’s roughly 15 minutes from President Trump’s Mar-a-Lago, which is now the president’s registered primary residence. - REALTOR

9. The home built in 1887 for Pfizer Pharmaceutical co-founder Charles Erhart’s daughter is for sale. The $10 million, Clinton Hill, New York, house known as the "Pfizer Mansion" had its price reduced from its initial $13.5 million. It features four suites, a library and elaborate custom woodwork throughout. In addition to its first owner, the house has also traded hands between the Roman Catholic Church — which used it as a bishop’s house in the 1930s — as well as musician Legion Davies who bought it in 1991. In the 1920s it also housed the Brooklyn Committee for the Prevention of Tuberculosis and the Brooklyn Public Library. - PATCH

10. Business Insider says that homebuyers who pay higher upfront fees in order to take out a mortgage with a lower interest rate should plan to live in the house for at least five years. That’s roughly the average length of time that it will take to break even on the costs at the start of the loan (which allow for the lower interest rate). Buyers should first consider how much of a down payment they can afford, the length of the mortgage term, their ideal interest rate and what monthly payments they can afford. Other important considerations include whether or not the home’s costs will still allow you to have emergency savings. - BUSINESS INSIDER

Written and curated by Darla Guillen Gilthorpe. Darla writes for the Houston Chronicle, where she was part of its 2018 Pulitzer Prize finalist staff. She was previously an editor at Vox Media site Eater and has had bylines in Elle Decor, SFGate and various other outlets. Follow her on Twitter here.

Editor: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside).

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