Inside | Real news, curated by real humans
Inside Real Estate

Inside Real Estate (Dec 26th, 2019)

Let's take a look back at some of the biggest stories of the real estate industry in 2019.

Inside.com will return to its regular publishing schedule on Jan. 2. Happy holidays!

– Darla

1. The government shutdown in early January 2019 impacted the real estate industry by creating federal housing program staff shortages and temporarily suspending certain nationwide programs. The 35-day shutdown began in late December 2018 and ceased on Jan. 25, before heavily impacting mortgage closings or slowing investments.  — FORTUNE

2. Zillow Offers, an iBuyer division of the real estate listings platform that directly sells and purchases houses to people, in mid-January expanded to several major metros. These included: Miami, Nashville, Orlando, Portland, Oregon, and Minneapolis-Saint Paul. By the end of the year, Zillow Offers began operating in 22 other cities, including the second-largest market in the country, Los Angeles. - GEEKWIRE

3. In February, a bankruptcy judge approved a $5.2 billion bid from Sears chairman Eddie Lampert to keep 425 stores open, but that didn’t stop more shutters. However, Sears closings continued throughout the year, as the “retail-pocallypse” only worsened over the months. - USA TODAY

4. Real estate brokerage and tech company Compass in late February acquired its first massive tech purchase: real-estate software provider Contactually. The company continued its rapid growth through 2019, including poaching major agents in large metros as recently as mid-December. - WASHINGTON BUSINESS JOURNAL

5. Spending on commercial real estate in the UK saw its first big dip in March as a result of market insecurity fueled by Brexit. The political issues continued to hammer that nation’s real estate market throughout the year. - BLOOMBERG

More Brexit coverage: Guardian | BBC

6. Warren Buffett's HomeServices became the top brokerage in the U.S. in March, toppling NRT after a 20-year reign. Later in the year, Dec. 13, it was announced that Keller Williams had poached his top producer, Jeff Cohn's 35-person Omaha’s Elite Real Estate Group. - HOUSINGWIRE 

7. California's controversial SB50 bill passed through the  Senate Governance and Finance Committee. The proposal was drafted to change zoning around areas of public transit across the state to allow for larger multifamily housing. - SF CHRONICLE

8. WeWork was growing...until it wasn’t. A brief timeline: 

  • In May, WeWork was building a $2.8 billion investment fund for buildings in which it planned to lease space. At this time, critics had already been foretelling the implosion of the coworking company. 
  • Three months later, the company filed its S-1 document with the Securities and Exchange Commission, signaling its first step to go public. The filing reveals its rapid spending and questionable governance by CEO Adam Neumann. 
  • By early September, we learned that WeWork's private valuation of $47 billion was much less than the targeted valuation of $10 to $30 billion for its IPO. WeWork later issues a new regulatory filing in which it reveals that it will make changes to its criticized governance (by reducing Neumann's voting power). By the end of September, Neumann stepped down as CEO and WeWork delayed its IPO indefinitely. 
  • In late December, WeWork said it arranged a "$1.75 billion letter of credit with Goldman Sachs," which would be syndicated. Its funds are anticipated to become available in January. The credit line is part of a bailout announced in October, after WeWork's roller-coaster year.

The future of co-working: Yahoo Finance | Crain’s | Wall Street Journal

9. Flooding plagued a number of homes and buildings in the Midwest. Federal and local governments spent more than $5 billion purchasing at-risk homes. - PINE BLUFF COMMERCIAL

10. Freddie Mac in late June launched CHOICERenovation. The new home renovation mortgage allows borrowers to combine the original home loan with funds for renovations. The loans can be used to repair homes damaged in natural disasters or to take preemptive measure to safeguard properties. - WASHINGTON POST

11. Mortgage provider Stearns Lending in mid-July filed for Chapter 11 bankruptcy as it began debt restructuring. The news came as Stearns Lending founder, Glenn Stearns, starred in a Discovery Channel show called "Undercover Billionaire," in which he’s tasked with launching a new million-dollar company in 90 days. - HOUSINGWIRE

12. In late August, Facebook announced plans to launch "privacy checkup" café pop-ups, which could eventually be a beneficial concept for unused retail space. The first-ever café, in which Facebook employees teach users about the company’s privacy settings, kicked off in late November in Singapore. - BUSINESS INSIDER

13. The largest resort in Phoenix, Arizona, sold for $603 million. The 396-acre JW Marriott Desert Ridge Resort & Spa was acquired from Blackstone Group by a joint venture backed by Trinity Real Estate Investments and Elliott Management Corp. The new owners are planning a multimillion-dollar remodel of the resort. - CP EXECUTIVE

14. Experts warn home shoppers not to buy a house only to benefit from today’s historically low mortgage rates, the Washington Post reports. While that’s a tempting lure, real estate advisors say to consider these factors before signing on a new house: 

  • How long will you own the property (less than two years could mean you won’t recoup your money)
  • How will the mortgage payment compare to rents in your market
  • Can you afford unexpected maintenance costs and 
  • If this is your second house: should you refinance your primary home? 

15. Old Navy appears unfazed by the “retail apocalypse” as it announced plans for an 800-store expansion that would continue well into 2020. The retailer, which should be an independent entity by 2020, anticipates launching 75 new stores per year, bringing their total to roughly 2,000 locations across the U.S. Meanwhile, other national retailers have already announced the closing of approximately 8,200 stores as consumers turn to online shopping. - BISNOW

16. Forever 21 filed for bankruptcy and announced that it would be closing 350 stores, including up to 178 in the U.S. The company said it would also renegotiate several of its U.S. leases, many of which are in "lower quality" shopping malls. Expensive leases are among the obstacles that have hurt the company, especially those paid in malls with declining foot traffic. - NEW YORK TIMES

17. How to invest in real estate without buying a property: Financial technology startup Lex Markets will allow investors to buy small portions of commercial buildings starting in increments of $100. The offerings will be listed on Lex's platform, and independent appraisers will gauge the equity each $100 share buys. The company plans to obtain approval from securities regulators to launch its first listing: stakes in a Midwestern mixed-use property. The owners of Lex Markets are Dean Sterrett, 24, and Drew Sterrett, 26, who founded the company in 2017, after lamenting that as non-accredited investors, they couldn't “couldn’t own real-estate properties directly.” The firm has already managed to assemble more than $1 billion in coming deals and micro-stakes in properties ranging from retail buildings to medical facilities and hotels. - WALL STREET JOURNAL

18. Some hospitals across the U.S. announced plans to provide affordable housing for former patients since that’s more economical than keeping them in-house after treatment. American hospitals legally cannot discharge patients who have no safe place to go, so it’s up to them to provide a reasonable alternative. - USA TODAY

19. President Trump in late October changed his primary residence to Palm Beach, Florida, from Manhattan. His “declaration of domicile” names the president's resort Mar-a-Lago Club as the new primary home for him and his wife, Melania Trump. - NEW YORK TIMES

20. California's wildfires ravaged countless homes across the state. The fires caused billions of dollars of property damage, burned down hundreds of thousands of acres, and displaced thousands of people from their neighborhoods. They’re also being blamed for a housing shortage, as well as a home-price spike in that state. - NBC

21. The National Association of Realtors in November voted to ban pocket listings for the best interest of the public. “This way, every seller will get maximum exposure of their property and every buyer will be able to find all the properties for sale in their area," MLS chair of the NAR committee, Greg Zadel, said. - WASHINGTON POST

22. The tech giants that may have contributed to California's housing crisis are now pledging aid for those impacted by the downturn. But these corporate donations might not be enough, experts claim. Amazon, Apple, Facebook and Google have each either offered billions in monetary donations or have provided charitable centers. However, Bay Area residents say they’re currently "being displaced," because their rents are rising too quickly, and some of the recently announced housing solutions are “too little, too late.” - CNBC

23. In mid-December, the Supreme Court refused to hear an appeal case that would make it illegal to sleep and camp in public spaces. How cities deal with homeless encampments is a topic that’s increasingly receiving attention nationwide - NPR

24. Starting Jan. 1, all new-construction homes in California must include solar power capabilities. The new building ordinance is the first in its class in the U.S. Existing dwellings will not be required to adhere to the policy. - SANTA CRUZ SENTINEL

25. The 2020 forecast: Next year is anticipated to be a tough one for residential real estate, according to Realtor.com's 2020 forecast. Among its predictions: home prices will flatten, inventory will be tight (particularly for the entry-level market), mortgage rates will increase and buyers will chase affordability. The last prediction, the report states, will likely cause growth in mid-sized markets, since people will pursue better housing costs outside of the major metros. - CNBC

Other 2020 real-estate forecasts: Forbes | Zillow | Freddie Mac | Bisnow

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.

Subscribe to Inside Real Estate