A Southern California investor appears to be extending its Bay Area buying spree by closing in on a discounted deal for an office in one of the nation’s hardest hit real estate markets in the wake of the pandemic.

Los Angeles-based BH Properties intends to pay $13.5 million for a 111,000-square-foot office in downtown San Francisco at 989 Market St. in a deal expected to close next week, people familiar with the transaction tell CoStar News. That price would mark a nearly 80% discount to the $61.2 million that the office sold for about a decade ago, when ABS Real Estate Investments acquired the site. The deal hasn’t closed so nothing is final.

Office valuations are declining across the country as investors grapple with higher interest rates and low tenant demand. Properties in the U.S. West have been among the hardest hit in recent years, with dense California markets such as San Francisco and Los Angeles dealing with a reduced workforce.

Valuations for office buildings in the U.S. West are off about 5.1% in the past year, according to CoStar Group’s most recent Commercial Repeat-Sale Indices. The report showed the region posted the second greatest price declines during the second quarter, with office valuations off 1.8% from the first quarter, slightly better than the 1.9% decline seen in the U.S. South.

Across all property types, the West came in last in terms of second quarter price performance. Countrywide, the office sector was the hardest hit during the second quarter with valuations off 2.9% from the prior quarter and 8.1% from the same quarter last year.

The downtown San Francisco office is the latest to showcase dwindling price devaluations in the region; San Francisco offices lost nearly 10% in value in the last year, trailing only San Jose for the largest decline in California, according to CoStar data, and ranking among the hardest hit in the country.

The largely vacant office counts just Blick Arts Materials as a tenant, according to CoStar data; the company occupies 13,000 square feet.

The deal, reported earlier by the San Francisco Chronicle, marks BH Properties’ third acquisition in the Bay Area in the past year. Last June, it shelled out $65 million for Oakland’s 60-acre Holy Names University campus, and two months later, it paid roughly the same amount for the 200,000-square-foot Anchorage Square shopping center in San Francisco. The mall last sold for $95.5 million in 2004.

BH Properties paid about $123 per square foot for its latest Bay Area buy, lower than some of the discounted office deals to take place in San Francisco in recent months.

Last week, England-based Wellington College paid $23.5 million, or $371 per square foot, for 99 Rhode Island St. with plans to turn Airbnb’s former headquarters into a new school. Earlier this year, New York Life Insurance bought the 70,000-square-foot 410 Townsend for $22 million, or $278 per square foot, according to previous reporting by CoStar News.

San Francisco’s vacancy rate sharply rose in the wake of the pandemic and it remains at a historic high of 22.2%, largely caused by remote work trends and technology tenant reductions. That, coupled with higher interest rates and a decreased lending appetite for offices across the country, has served as a downward force on office values.

In a recent example, a national lender is taking over a vacant 449,000-square-foot campus at 350-380 Ellis St. elsewhere in the Bay Area in Mountain View, and pegged the valuation of the office campus at nearly $121 million, a far cry from the $357.5 million price that the property sold for in 2021.

Source: Costar

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Chubb’s renewed global property cat reinsurance program consists of three layers in excess of losses retained by the insurer on a per occurrence basis.

For losses in the US (excluding Alaska and Hawaii) for 2024, Chubb’s all natural perils and terrorism cover attaches after a $1.75 billion retention, up $650 million from the $1.1 billion retention in the 2023 program.

As well as the higher retention, the structure of the program has also changed. Last year, Chubb had a three-layer approach for the US, with reinsurance for all natural perils and terrorism attaching at $1.1 billion in losses, then spanning three layers up to $3.5 billion.

For 2024, Chubb has secured a layer of reinsurance coverage for US (excluding Alaska and Hawaii) all natural perils and terrorism attaching at $1.75 billion up to $2.85 billion, and a second layer attaching at $2.85 billion up to $4 billion of losses. So, overall, having had all natural perils and terror reinsurance from $1.1 billion to $3.5 billion last year, Chubb actually has slightly less of this coverage for 2024.

However, after a $4 billion attachment, for 2024, Chubb has secured US (excluding Alaska and Hawaii) named storm and earthquake reinsurance coverage to cover losses up to $5.7 billion.

Additionally, effective September 1st, 2023, Chubb purchased an additional layer of per occurrence coverage for named windstorms and earthquakes within Northeast states, which attaches at $3.5 billion and covers losses up to $4 billion. This additional layer sits alongside the US named storm and earthquake coverage as an additional cover for that region.

Chubb also renewed its international property catastrophe reinsurance at the April 2024 renewals, again lifting the retention but also the top of the tower.

The retention for this coverage has increased from $200 million in 2023 to $225 million for 2024, after which international (including Alaska and Hawaii) all natural perils and terrorism cover extends to $1.325 billion of losses. Above this layer sits Alaska, Hawaii, and Canada all natural perils and terrorism cover up to $2.475 billion of losses. Last year, the first layer attached at $200 million up to $1.3 billion, and the Alaska, Hawaii and Canada layer extended up to $2.45 billion of losses.

All in all, for 2024, primary insurer Chubb has more reinsurance in-force in the top-layers, although with more in losses set to be retained in the US.

Source: Reinsurance News

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The rent is, infamously, too damn high. That refrain has such staying power because the United States’s noxious rent crisis has shown no signs of abating, with rents rising over 30 percent since 2019. All manner of ill effects have resulted; the rapid simultaneous growth of the homelessness crisis is no coincidence.

Obfuscations aside, the correlation there is quite direct. But the origins of the rent and housing crisis itself can seem a bit more diffuse: perhaps some combination of shortages driven by lulls in development (though in truth, we don’t lack housing per se so much as we lack affordable, low-income housing). Those shortages, in turn, can be influenced by zoning law, mortgage interest rates, various public policies, and other variables like rising materials costs. Neither is it helping matters that Wall Street private equity funds are buying up homes in droves to flip them for profit.

But in 2022, a singular factor that exerts an outsized influence on rent hikes was identified: In October of that year, reporting by Heather Vogell in ProPublica turned up some remarkable revelations. Vogell found that the nation’s punishingly high rents are not solely attributable to vague and abstract structural trends. In fact, allegedly, landlord-coordinated price-gouging has been taking place, and at a staggering scale.

The ProPublica investigation found that a software called YieldStar, supplied by a company called RealPage, has provided a means to share pricing information between large corporate landlords. The program feeds this information into an algorithm that determines the highest possible rent and directs its users to set rents to maximize profit — effectively, legal challenges argue, a form of collusion-by-algorithm to keep rents high. The software has facilitated anti-competitive market manipulation on a scale that multiple state attorneys general and the Department of Justice (DOJ) have charged is tantamount to a nationwide price-fixing cartel.

The subsequent litigation efforts and government inquiries into RealPage and many of its clients continue to mount: class-action and private lawsuits are pending in multiple states, and may set an important precedent for analogous cases. Now, the Department of Justice has weighed in to support plaintiffs and is conducting civil and criminal investigations of its own — and relatedly, a recent FBI raid of one of its major clients indicates that RealPage is facing some real trouble.

Nationwide, the ubiquity of RealPage software among residential management corporations has meant that its algorithmic suggestions and competitor price data have in all likelihood played a determining role in the inflation of rents across the country, exacerbating the suffering of everyday people and inflaming the homelessness crisis. Depending on the outcome of litigation, the cases against RealPage have the potential to set major precedents: Inadvertently, RealPage may end up being comparably influential in the future prosecution of algorithmic price-fixing charges.

Price-Fixing at Scale

The sweeping success of RealPage’s algorithmic rent-setting software product, YieldStar, has its origins in a questionably green-lit 2017 corporate merger in which RealPage acquired four companies — its largest competitor Rainmaker Group among them. The latter company made a software called Lease Rent Options, which, once acquired, granted RealPage access to software technologies and reams of new client data. (The acquisition of the original, obsolete version of the YieldStar platform appears to date to 2002). RealPage found great success hawking its signature YieldStar product and later comparable software suites, thoroughly embedding itself in the industry and attaining near-ubiquity among major landlords. Today, RealPage has traded on that data and rent-raising acumen, expanding to immense proportions, and its products are now involved in the administration of millions of housing units worldwide.

That success is attributable to its adeptness at increasing profits — by a “consistent” 3 to 7 percent year-over-year growth rate on a given property, according to the company itself. At the highest levels, as rent climbs ever-higher and the increased income from those properties trickles all the way up to the top of the hierarchy, the largest corporate landlords have been treated (or rather, have treated themselves) to a profit windfall.

RealPage software works by computing and sharing both public and private rent data from the other local managers, including direct competitors, in RealPage’s extensive client portfolio. To a given client, the software then presents “suggestions” for just how high rates can (and should) be pushed for a property asset in the area. The sustained, elevated rates that the algorithm spits out are only possible when squeezing a powerless and captive audience — when all the other apartment complexes in town are doing it, too.

The effective result is coordinated price-fixing: i.e., the mutual (and illegal) agreement between competitors that none among them will undercut the other’s prices too severely, keeping their products as expensive as possible across the board and ensuring more profit for all. In addition, the widespread use of RealPage software may not only catalyze rent increases — it also incentivizes landlords to accept the low occupancy and high turnover rates that can come with inflated prices and evicting tenants to raise rent.

In effect, the program trains landlords to operate against what was considered conventional industry wisdom: that high occupancy is the best route to high profits. Instead, landlords now trade on RealPage’s key discovery, the strategic innovation that has enabled the algorithm to deliver such outsize returns: if profit is all you care about, then it’s more effective to prioritize income by rent-gouging instead of keeping more units occupied. Low occupancy and higher prices then worsen shortages, establishing a feedback loop.

It’s true that this modern variety of illegal coordination relies on algorithmic computations rather than the more traditional smoke-filled back rooms. However, it is appearing that, legally speaking, that distinction may be moot.

Wave of Litigation

Numerous lawsuits promptly followed the publication of the ProPublica investigation. Initiating the series was a suit filed in San Diego, with renter plaintiffs from both California and Washington State suing RealPage as well as massive landlords Greystar and Lincoln, which are some of the largest property management firms in the nation, just days after the article came out.

Analogous litigation has also been filed in Fresno, California. Across the country in Nashville, Tennessee, a number of private lawsuits against RealPage and landlords were consolidated into a single case. Suits against two of those defendants were settled in February, but plenty more remain ongoing. Additional class-action suits — including in a suit targeting RealPage plus nine landlord companies in Arizona, and another against RealPage and 14 landlords in Washington, D.C. — are also well underway.

Lee Hepner is an antitrust lawyer and senior legal counsel at the American Economic Liberties Project. Reached by Truthout, Hepner detailed the potential significance of the various incarnations of the RealPage litigation. To begin with, the government handling of the litigation from case to case is far from assured. Different parties in the Federal Trade Commission (FTC) and the Department of Justice, Hepner points out, fall across a spectrum of opinions as to the relevance of existing antitrust and price-fixing law to these sorts of cases.

An analogous case against Rainmaker (the same company that merged with RealPage), which was under fire for its provision of software that allegedly helped Nevada hotels coordinate prices, was thrown out by Chief Judge Miranda Du — it could not be proven, according to her ruling, that the hotels actively collaborated to fix prices. Du’s decision could prove highly relevant to other cases against RealPage, as it highlights a distinction in thinking among different elements in the criminal legal system.

While Judge Du saw the algorithmic aspect as a novel application of price-fixing law, Hepner explained that others in the legal system have a different approach: “You have a different school of people, including members of the Federal Trade Commission and Department of Justice, who have argued that price-fixing by algorithm is still price-fixing. There’s a little bit of an ideological disconnect between the camp that says, ‘This is price fixing — doesn’t matter that it’s being done with a software algorithm,’ and the judiciary, particularly the case of Judge Du, saying that this is a relatively novel application of price-fixing law because it invokes the functionality of these newer software algorithms.”

Hepner, speaking from experience as an antitrust lawyer, explained how difficult it can be to further a price-fixing charge through the court system. “These cases are making their way through the courts, and where they get tripped up is at the motion to dismiss phase,” he told Truthout. “The Supreme Court, going back to 20 years ago, has really raised the pleading standards required to survive a motion to dismiss phase. That phase is very early on in the litigation, before parties have been able to conduct any discovery, so they’re operating on limited facts.” The legal procedures structuring these lawsuits may well have a determinant impact on the results.

This might well explain the early settlement reached in the Nashville cases — there are difficult hoops that suits such as these must make it through. As Hepner said, “I think we’re learning whether existing law is adequate to confront the problem of algorithmic price fixing. And we’re learning that through how judges are applying it, in somewhat inconsistent ways.”

The Department of Justice has shown signs that, at least in some cases, it does back plaintiffs bringing the suit against RealPage, indicating that the case is a viable one; before the settlement, it gave an official blessing of sorts to the tenant plaintiffs in the Nashville cases, issuing a type of legal memorandum called a Statement of Interest of the United States, in which the DOJ reiterated the antitrust statues in question. Along with effectively siding with tenant plaintiffs against RealPage, the Justice Department also initiated a civil proceeding of its own in late 2022.

On two occasions, U.S. senators have written letters to the Department of Justice Antitrust Division requesting further, potentially criminal investigation into RealPage. First came Amy Klobuchar, Dick Durbin and Cory Booker in late 2022, followed in March 2023 by Elizabeth Warren, Tina Smith, Bernie Sanders and Edward J. Markey. The latter four urged in their letter that “the DOJ should act to protect American families and closely review rent-setting algorithms like YieldStar to determine if they are having anti-competitive effects on local housing markets that have seen increased institutional investor activity.” Evidently taking heed of their words, later that month, the Department of Justice opened a criminal probe, in a significant escalation. May’s FBI raid of the offices of RealPage client Cortland Management appears to be related to that inquiry.

Interestingly, it’s the third time that the DOJ has intervened in cases of algorithmic pricing lately; clearly, it considers algorithmic collusion as equivalent to the more familiar kind. In fact, in one of those cases, filed by a Seattle tenant against Yardi Systems, which produces comparable property management software, the plaintiff is leveling very similar charges as those faced by RealPage — in this instance against a Yardi price-setting software product called, far too pointedly, “RENTmaximizer.” In addition to the Nevada hotel case involving Rainmaker, Hepner also pointed to a case involving potential algorithmic price-fixing collusion via sharing private information, this time in the poultry industry: one of two lawsuits against the AgriStats software, another price clearinghouse venue, which it is alleged, facilitates “anticompetitive information exchanges.”

One of the ongoing class-action lawsuits against RealPage has been filed in Arizona by the office of Attorney General Kris Mayes. Truthout reached Mayes’s office for comment on the pending litigation. Asked about the nature of the charges against RealPage, Director of Communications Richie Taylor described the violation as follows: “The defendant landlords illegally colluded with RealPage to artificially raise rents and concealed their conspiracy from the public. By providing highly detailed, sensitive, non-public leasing data with RealPage, the defendant landlords departed from normal competitive behavior and engaged in a price-fixing conspiracy. RealPage then used its revenue management algorithm to illegally set prices for all participants.”

Chiefly, in this particular case, the violations are of antitrust and fraud laws on the Arizona books: the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act. The latter is relevant because, as Taylor explained, the Consumer Fraud Act “makes it unlawful for companies to engage in deceptive or unfair acts or practices or to conceal or suppress material facts in connection with a sale, in this case apartment leases.”

The AG’s office drew a direct link from RealPage’s widespread availability to the local rent crisis and tenant harms: “In the last two years, residential rents in Phoenix and Tucson have risen by at least 30% in large part because of this conspiracy that stifled fair competition and essentially established a rental monopoly in our state’s two largest metro areas.”

The Arizona class-action suit is pursuing an injunction to halt RealPage’s practices, as well as “restitution for consumers harmed by their conduct, civil penalties to the full extent authorized by Arizona law,” plus “any other equitable relief the Court deems appropriate.” In a certain respect, RealPage has already halted of its own accord: according to some sources, YieldStar has been shelved in the wake of the lawsuits. However, RealPage continues to operate a rebranded “AI Revenue Management” suite that empowers clients to “Maximize revenue potential with timely, actionable data.” The company will also be rolling out the new, AI-driven “Demandx,” promising “data-informed insights” to “optimize the entire demand funnel,” as the business press breathlessly reported.

Cartel Enforcers

RealPage has certainly found themselves on the defensive lately. But the Department of Justice and its Antitrust Division were not always such a bitter foe. It was under the Trump DOJ that the merger between RealPage and Rainmaker, which supplied the data and instigated the chain of events that brought RealPage software to nationwide prominence, was approved by the very same Antitrust Division. Well, not precisely the same one — in another ProPublica article, Heather Vogell cited a source who claimed that DOJ staff concerns raised internally at the time “were overridden by political appointees of former President Donald Trump.” The Biden Department, conversely, is keen to make antitrust enforcement one of its primary focus areas.

Reached for comment by Truthout, RealPage directed readers to a previously published statement. Company representatives have contested in court arguments that, because their software only offered “suggestions” and set prices by faceless algorithm, its functions did not amount to facilitating collusion or price coordination. Similar points were raised in the letter the company wrote in response to senators’ calls for investigation, claiming that reporting misrepresented the algorithm’s functioning.

Nevertheless, as Department of Justice prosecutors wrote in the Statement of Interest, “[W]hether firms effectuate a price-fixing scheme through a software algorithm or through human-to-human interaction should be of no legal significance. Automating an anticompetitive scheme does not make it less anticompetitive.”

And, more to the point, findings of the DOJ probe appear to indicate clear intent on the part of RealPage to incentivize and even enforce compliance with the algorithm’s calculated rent maximums — going beyond friendly “suggestions.” Again, in a price-fixing gambit, in order to reap the benefits, it is critical to ensure prices remain high throughout the market; one undercutting competitor can spoil the game.

As Hepner explained, there are indeed significant obstacles that a case of this sort must breach. But in the RealPage cases, it’s becoming apparent that evidence of active coordination and enforcement is rather damning. In a price-fixing case, said Hepner, “The burden of proof is on the plaintiffs to plead more than just what’s called ‘conscious parallelism.’ It’s got to be more than just the fact that competitors were raising or lowering their prices around the same time. You have to allege actual evidence of an agreement between the parties.”

“The key variable here, where we see the cases break,” he went on, is the evidence of RealPage’s enforcement of prices. “In the hotel price-fixing case in Nevada, the court did not find evidence that the parties were actually adhering to the price recommendations of this central Rainmaker algorithm. … Hotel chains weren’t necessarily taking the recommendations.”

“That’s very different in the RealPage cases,” Hepner continued. “The pleadings there suggested that there was actually a very cumbersome process [that was necessary if a client wanted to] deviate from the recommendations that were being made by RealPage.”

There was, Hepner noted, an allegation that individual clients of RealPage were assigned a pricing adviser who would ensure compliance with these algorithms. “The penalty for which could be, you get kicked out of the algorithm’s pricing recommendations, and you no longer get to use RealPage. They were really enforcing its price recommendations — and that was evidence of an agreement.”

The DOJ’s Statement of Interest echoed those findings that arose during pleading: “To ensure that the landlords abide by these ‘recommendations,’ RealPage puts significant pressure on them ‘to implement RealPage’s prices,’ including by requiring clients to submit requests to deviate to the ‘corporate office’ and tracking the ‘identity of the client’s staff that requested a deviation. … As a result, landlords using RealPage adopt RealPage’s recommendations 80-90% of the time. … Collaboration on prices, including via sharing nonpublic pricing and supply information, is thus the central feature of the product.”

The DOJ statement also describes and quotes an especially damning characterization: “As an employee for one landlord stated: While ‘we are all technically competitors, [RealPage product] helps us to work together … to make us all more successful in our pricing,’ as the software is ‘designed to work with a community in pricing strategies, not work separately’” [emphasis added].

The text of the San Diego lawsuit contains a similar charge, detailing RealPage’s encouragement and outright requirements of conformity with the “cartel’s” pricing demands:

If [landlords] wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval. RealPage encourages participating Lessors to have daily calls between the [landlords’] employees with pricing responsibility and the RealPage Pricing Advisor. … RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating [landlords] must adopt RealPage’s pricing at least 80% of the time.”

Another factor upon which RealPage cases may hinge is the use of public vs. non-public information. It’s perfectly legal for a company to use publicly available information to set prices. But, said Hepner, “If you’re mixing non-public information into that analysis, and that non-public information is being shared with competitors, that, too, can be evidence of an agreement.”

The result is what’s known as a hub-and-spoke conspiracy, said Hepner. “RealPage, the hub, was enforcing its recommendation on the spokes, the landlords, which created a rim” of collusion. In the Nevada case, conversely, because recommendations were not enforced, “they could not prove that there was actually a rim connecting all of the spokes. Without that rim, you don’t have an agreement, under the law.”

It would seem that there is abundant evidence legitimating the charges tenants are bringing against RealPage in cases nationwide. However, again, as Hepner noted, the risk to these lawsuits is that, because major decisions are made in the pleading stage, “the court is exercising major discretion to make assumptions about the full facts and nature of the case before discovery has come to light, before you actually have that real information to base it on.” For that procedural reason — as well as the differences of opinion in the Department of Justice regarding the appropriateness of price-fixing law — it’s possible that some of these lawsuits may fail.

For the time being, as litigation mounts, RealPage’s operations continue in the background. The company’s offerings are not limited to algorithmic rent services; it also produces a tenant screening program, a type of product rife with bias — and a product over which RealPage was fined $3 million by the FTC for failing to ensure personal information was accurate. (RealPage is also now owned by private equity company Thoma Bravo, in an intersection of insidious housing trends.) Those deep pockets may help prolong the lawsuits far into the future.

Hepner offered strategic insights into the future progression of the cases: “If a price-fixing case can survive the ‘motion to dismiss’ phase, then you’re in full-blown litigation. … Some parties may decide, if they lost the motion to dismiss … [that they would] rather settle this than go through the whole process of litigating a very costly, expensive and cumbersome trial.” This was likely the origin of the early settlement reached in Nashville: “I think that’s what happened in the Tennessee case — some parties saw the motion to dismiss as the writing on the wall,” Hepner told Truthout.

Because of the high profile and the novel (i.e., algorithmic) aspects of these cases, it’s apparent that the ultimate outcomes of RealPage lawsuits may have a significant precedent-setting impact. Asked if he felt the RealPage litigation would form an influential precedent, Hepner said, “I think so. These cases are informing each other. … There’s certainly a dialogue going on, not just between the defendants, but among the district courts that are considering these cases. I think we’re watching as the law is being shaped in real time.”

Real People

The effects of RealPage’s price-setting facilitation and landlord profiteering were not confined to an abstract financial realm. They had substantive impacts on people’s lives, livelihoods and well-being. Truthout spoke with tenants of corporate landlords to learn how the rent crisis has impacted them. Sarah (who requested to go by a first name only to avoid any potential retaliation from her landlord) lives in a one-bedroom in a large apartment complex administered by a major corporate landlord in Tucson. Echoing the facts presented in the lawsuit by AG Mayes’s office, she described the everyday frustrations of living in Tucson, where median income levels rate below the rest of the state and the national average.

“In 2021 to 2022, rent increases went nuts. … My rent went from $1,240 to $1,450. They then raised me to $1,500 and started charging me for the garage, which I didn’t have to pay for my first year here.” Sarah alleges that a manager informed her that they adjust prices as often as “every two days to match the market.” When she attempted to press them about their use of RealPage to tune prices as high as possible, they demurred, claiming that it was proprietary information.

Sarah is hoping that the Arizona lawsuit brought by tenants and AG Mayes’s office against RealPage and its clients might eventually include her own corporate landlord, one of the largest in the region; right now, the company goes inexplicably unnamed in the suit, for reasons unclear.

In the meantime, though, Sarah says her rent has stabilized for now. “I think they probably know at this point they’ve stretched people out as far as they can go,” she told Truthout. “It’s just become unmanageable, since wages are so low in Arizona. I’ve had to change jobs like four times since I moved here, and have a second job on the side.”

As a result of long-stagnant wages and the rent crisis, stories like Sarah’s are not uncommon. Bri is a disabled woman of color who has lived in Boston for three years; she also requested that she be referred to by only her first name to avoid any consequences for speaking out. In that span, she’s moved three times, in large part due to rent increases. Her current residence is managed by Bozzuto Management Company — one of the 14 named alongside RealPage in the lawsuit filed in Washington, D.C. by Attorney General Brian L. Schwalb.

Bri described major frustrations in trying to secure housing compliant with the Americans with Disabilities Act (ADA) in a major city. First of all, before her tenure at a Bozzuto building, she lived in a unit owned by another property management corporation (almost without a doubt another RealPage customer, as the software’s use is endemic among corporate landlords, with Boston being no exception). When that company decided to increase her rent by $600 a month, an apartment for which she was already paying $3,150, Bri and her husband decided to move out.

She moved to a Bozzuto property in August 2023, paying $2,330 for a smaller ADA-compliant unit. But when a leak developed in her unit, she was forced to move to a different (though, she says, not better) unit — and was now paying $2,650 a month for the privilege.

“It’s a lot, to move. Every year I’ve had to move because the rent went up, or some problem with the commute. … It’s really frustrating that we couldn’t get the same rent [as the previous unit that was damaged by the leak],” she told Truthout. “Our unit is not too much different, other than our windows are slightly bigger.” And what’s more, she said, upon her next lease renewal, her landlord will be increasing her rent by another $300, on top of the already elevated rate.

Bri, speaking for herself and other tenants, described a pattern of poor responsiveness to maintenance issues and Bozzuto’s attempts to push for rent increases whenever possible. She reported seeing company social media posts boasting of 95 percent occupancy rates when the buildings were still unfinished — and while managers, she felt, did little to meet the needs of existing tenants. Yet there is little recourse, should she seek to move again. “One of the things I think about — with all of this price-fixing going on, in Boston, the smaller landlords are also raising their rents that much. There’s nowhere people can go for a reprieve,” she said. (Bozzuto Management Company did not respond to Truthout’s request for comment.)

“I’ve noticed [the impact on my finances],” Bri went on. “I don’t buy much. If I buy anything for fun, I notice it. I already don’t make enough to live in Boston. And I don’t think anybody else does. [Laughs.] My husband is unemployed, and it’s hard. We have this $300 rent increase in the middle of the year.” Bri does not, she said, see a commensurate increase in conditions or service that would justify an increase.

“[Over time, in Boston] quality of life has declined, not increased. [Charging more] doesn’t make any sense. At some point I decided, yeah, this has to be because of some algorithm.” When her husband went to the building managers to ask if they could maintain the same rent as their first unit, Bri said, he received stony indifference in return. “They don’t care, because they can always get someone else to take the apartment.”

Bri’s story is only one of millions, of course. At scale, RealPage software (formerly YieldStar, and now in its other incarnations) is so widespread that the true difficulties low-income people face from rent hikes are unimaginable in scope. Making housing unaffordable does not only drive hundreds of thousands of people out to suffer in the street. It also makes the everyday struggles of those who do manage to cling to housing that much more punishing.

Housing, a realm of social necessity (alongside others like education and health care), has fallen victim to the profiteers of the neoliberal era, who are so often the victors when terrains of the commons are opened up to predation. Whether or not RealPage persists through its legal challenges, its existence in the first place points to the broader concern: the perverse incentives introduced into structural functions when social necessities are made subject to the prerogatives of capital. Inevitably, the profits are privatized, the costs socialized. In this case, the costs borne by society are a housing crisis and untold everyday sufferings.

Instead of a perennially precarious underclass, in a moral world, adequate shelter would be supplied to all — not as a commodity but as a human right. As Bri said of the treatment she and her fellow tenants received from her property company, “They’re obviously running it like a business. Not like this is a place to live.”

Source: Truth Out

The post Real Estate Software Aided Price-Fixing “Cartel” Among US Property Companies appeared first on Amora Escapes.

Reports of the real estate shuffle between them have only led to swelling speculations around their marital status. However, the “Gigli” costars haven’t publicly commented on any aspect of the various headlines about them swirling online.

About Jennifer Lopez’s New York City penthouse

Lopez’s stately penthouse at 21 E. 26th St in New York City, called the Whitman, is one of four units in the 6-story building that dates back to 1924 and was built in the Georgian style.

Although it was sold at $23 million seven years after its listing, it was first displayed for sale at $26.95 in 2017 (StreetEasy records). The spacious estate is 6,540 square feet and has four bedrooms, 7.5 baths and almost 3,000 square feet of outdoor space with four terraces on two levels. Lopez’s old property also includes a croquet pitch, a landscaped roof deck and a putting green.

Since its listing in 2017, the house has bounced on and off the market. According to Gimme Shelter’s report at the time, the posh property hit the market three years after JLo purchased it for $20.1 million. Her former residence, overlooking Madison Square Park, is one floor above Chelsea Clinton’s unit. Other surrounding views also feature the Flatiron Building and the MetLife Clock Tower.

The apartment’s new buyer is an anonymous LLC from West Palm Beach, Florida, per the Real Deal.

Four-time NASCAR Cup Series champion Jeff Gordon also previously owned a unit in the building.

Source: Hindustan Times

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Yet, even as sales stalled amid elevated mortgage rates and home prices, one silver lining emerged—more resale inventory entered the market, which has begun to put some downward pressure on the pace of home price growth.

Other good news for home shoppers is the decline in the median price for a new home—now below the median resale home price—even as builders continue offering incentives to lure buyers.

Nonetheless, experts say the housing market will only see renewed momentum once mortgage rates drop enough to ease buyer affordability obstacles and incentivize homeowners locked in at low rates to move.

Housing Market Forecast for 2024

Experts insist the housing market will improve despite high mortgage rates, out-of-reach home prices and sluggish sales transactions amid dampening demand.

Unfortunately, hopeful buyers continue to see a delay in this yearned-for transformation, thanks to several ongoing headwinds. One is inflation taking its sweet time cooling off, further delaying the Federal Reserve from cutting the federal funds rate.

Mortgage rates indirectly track this benchmark interest rate banks use as a guide for overnight lending. Consequently, with the federal funds rate at its highest level in over two decades, mortgage rates—and borrowers—are feeling the added impact on their ability to afford a home.

Meanwhile, U.S. home prices remain unaffected by persistently high mortgage rates, posting an annual 6.3% gain in April, according to the latest S&P CoreLogic Case-Shiller Home Price Index. Even as this annual gain marked a slowdown from the 6.5% gain in March, the index still broke the previous month’s record high.

Many experts expect a Fed rate cut will help stimulate the housing market, but it remains unclear when—and if—even a single cut will occur in 2024.

Will the Housing Market Finally Recover in 2024?

For a housing recovery to occur, several conditions must unfold.

“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”

Of course, mortgage rates would need to cool off, which seems promising given the recent declines. The average 30-year fixed mortgage rate remained consistent in July, coming in at 6.78% for the week ending July 25, a minor increase from 6.77% the previous week.

However, when mortgage rates finally go on the descent, Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.

“Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says.

He adds that mortgage rates returning to a more “normal” upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. Yet, Gumbinger predicts it could be a while before we return to those rates.

NAR To Implement Settlement Agreement Changes in August

Following years of litigation, the NAR has agreed to pay $418 million to settle a series of high-profile antitrust lawsuits filed in 2019 on behalf of home sellers. The settlement received preliminary court approval in April. A judge is expected to grant final approval in November. Meanwhile, NAR announced that the new required practices will go into effect on August 17.

The required new rules prohibit broker compensation offers on multiple listing services (MLS), the private databases that allow local real estate brokers to publish and share information about residential property listings.

Moreover, sellers will no longer be responsible for paying buyer broker commissions—upending an accepted practice that has been in place for years—and real estate agents participating in the MLS must establish written representation agreements with buyers.

If you sold a home in the past ten years, you may be eligible for a small piece of this settlement pie. Visit realestatecommissionlitigation.com for more information about filing a claim.

Housing Inventory Forecast: When Will There Be Sufficient Supply To Reduce Prices?

Despite more resale homes entering the market, the inventory shortage remains severe and likely will for some time, thanks to multiple headwinds.

For one, many homeowners remain “locked in” at ultra-low mortgage rates, unwilling to exchange for a higher rate in a high-priced housing market. Consequently, demand continues to outpace housing supply—and likely will for a while.

“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm.

New home construction has provided some relief, but not enough to fill the inventory gap meaningfully.

The U.S. remains 4.5 million homes short, up from 4.3 million a year ago, according to Zillow analysis.

Entry-level home supply is particularly dire, contributing to an ongoing cycle of propped-up demand and inflated prices.

Here’s what the latest home values look like around the country.

Home Builder Sentiment Dips

Builder sentiment continues to wilt with the summer heat.

High mortgage rates and sticky inflation are largely to blame for the dampened outlook for new construction, with builder confidence sliding from 45 to 43 in May, according to the most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the second consecutive month of downward movement and negative sentiment.

A reading of 50 or above means more builders see good conditions ahead for new construction.

Meanwhile, the construction of new homes, which had been on a tear, helping to fill the hole left by scant resale inventory, has slowed.

Permits for new single-family homes fell to their lowest seasonally adjusted annual rate since June 2023 amid builder blahs, dipping 2.9% month-over-month in May, according to the latest data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD). Housing starts were down 5.2%, and completions slid 8.5% from April.

However, there’s a silver lining for hopeful buyers—25% of builders slashed prices in May to boost sales, and more were open to offering incentives.

Residential Real Estate Stats: Existing, New and Pending Home Sales

Current and anticipated home sales transactions fizzled across the board in May thanks to scorching-high mortgage rates. Here’s what the latest home sales data has to say.

Existing-Home Sales

Existing-home sales dipped 0.7% in May, according to the latest report from NAR, marking the third straight month of declines as ascending mortgage rates and home prices deterred potential buyers. In May 2023, home buyers could get a mortgage rate well over half a percent lower at a time when homes were also more affordable.

Sales also fell 2.8% compared to May last year.

Experts believe home sales activity will perk up once inflation eases and the Fed finally starts to cut interest rates. Nonetheless, many prospective buyers—particularly first-time and lower-income home shoppers—will likely be left out in the cold, with the median price for an existing home in May soaring 5.8% from a year ago to a new record high of $419,300.

“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” said Lawrence Yun, chief economist at NAR, in the report. “The mortgage payment for a typical home today is more than double that of homes purchased before 2020.”

One upside to fewer sales is that resale inventory has been loosening since December. The latest NAR data shows inventory growing 6.7% month-over-month, logging 1.28 million unsold homes at the end of March. Still, only 3.7 months of inventory remain at the current monthly sales pace. Most experts consider a balanced market between four and six months.

New Home Sales

Meanwhile, new homes are also not invulnerable to high mortgage rates despite their shiny appeal.

Amid mortgage rates hovering close to or above 7%, May sales of newly constructed single-family houses plunged 11.7% 4.7% compared to April and 16.5% from a year ago, according to the latest U.S. Census Bureau and HUD data.

The good news for prospective buyers is that the slow pace of new home sales puts new home inventory at a level not seen since early 2008, according to Lisa Sturtevant, chief economist at Bright MLS.

“Buyers that remain in the market are starting to have more leverage, and sellers of existing homes are increasingly offering concessions, including help with closing costs and money toward repairs,” said Sturtevant.

Moreover, those shopping for new construction will be happy to hear that the median price for a new home in May fell $500 to $417,400—nearly two thousand dollars below the median existing-home price.

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Beltone Financial Holding, a large Cairo-listed investment company, announced that its wholly-owned subsidiary Beltone Real Estate Finance has obtained a license to practice real estate financing activity from the Egyptian Financial Regulatory Authority (FRA), according to the company’s statement on Sunday.

With this new license, Beltone aims to distinguish itself by offering unique solutions that make it the preferred choice for individuals and businesses seeking real estate finance.

“Beltone is keen to meet the growing demand for real estate financing from individuals and companies in Egypt,” Hassan Abdel-Nabi, the CEO of Beltone Real Estate Finance, said.

He expressed the company’s commitment to building long-term relationships and fulfilling customers’ needs at every stage of their financing journey.

The timing of this announcement could not be more opportune, as Egypt’s real estate sector is currently experiencing high demand. Investors are increasingly looking forward to allocating their savings to safe assets, with real estate being the most prominent choice.

Recognizing the significance of the real estate sector, the Egyptian government has taken steps to organize and enhance it. In August, the cabinet approved a draft law that aims to establish a national electronic database for real estate.

This database will simplify the registration of old properties, which is crucial given the presence of millions of unregistered old buildings throughout the country.

Egypt is boasting one of the largest real estate sectors in the Middle East and North Africa (MENA) region. In the first half of 2023, the country ranked second in terms of the value of ongoing real estate projects, totaling $500 billion, according to a report by global property intelligence firm JLL.

The report also highlighted that $771 million worth of residential real estate projects were launched in Egypt during the same period.

Private developers play a significant role in driving real estate projects in Egypt, as the country seeks to foster greater private sector participation in the economy.

Currently, the Egyptian private real estate sector is responsible for developing $180 billion worth of real estate projects. This accounts for 66 percent of total investments in the sector and 85 percent of all ongoing real estate projects in the country, as revealed by a report from Property Finder.

The positive growth trend in the Egyptian real estate market is evident, with some companies reporting in September a remarkable 100 percent increase in real estate sales value during the first half of 2023 compared to the same period in 2022.

With the sector witnessing high demand and the government taking measures to enhance its organization, Beltone aims to provide tailored solutions and establish enduring relationships with its customers as they navigate their real estate financing journey.

Source : AfricanMarkets

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“Greenville’s growing, it’s inevitable. This is what happens,” said Kristen Atchison, a Greenville resident.

But some of the numbers may be a little hard to follow.

“The city has proposed a tax rate that’s 2.69 cents higher than what revenue neutral would be for property owners,” said Brock Letchworth, Greenville’s public information officer.

So, we sat down with Letchworth to discuss what exactly the change means for homeowners. He says that an average $300,000 house could see property taxes go up around $200.00.

While the overall tax rate is lower than the current 48.95 cents, property value increases mean taxes will still go up.

“The city council has proposed a 39.54 cent tax rate, which is slightly higher than what a revenue-neutral rate would be given that the property owner would pay the same amount as they did last year. But as property values increase, they’re going to be paying a little bit more,” said Letchworth.

However, some citizens understand that may be the price they have to pay for the city’s development.

“With growth comes increase–increase of the property value, increase of taxes–it’s just that simple. Of course, we don’t want it, but we also want the property value to increase,” said Atchison.

As City Council Member Marion Blackburn says, despite some of the concern about taxes, there is a positive side.

“I think it’s important to look at the really exciting part of the reevaluation, which is that property values have really gone up. That shows that Greenville is a place that is desirable,” said Blackburn.

If this budget is approved, the city would bring in around three million dollars, with half of that going to public safety, including adjusting salaries and adding more fire rescue positions.

The City of Greenville will hold a public hearing on the proposed budget this Monday, June 10th, at 6 p.m. in the council chambers of city hall. The final vote on this budget is the following Thursday.

Source: WITN

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Inflation, stagnant salary growth, and high interest rates have made homeownership unaffordable for many South Africans, resulting in rent escalations as demand grows—which is good news for landlords.

On 30 May, The South African Reserve Bank’s (SARB’s) Monetary Policy Committee voted to hold rates, keeping the repo rate at 8.25% and the prime lending rate at 11.75%.

The decision was unanimous. Since the start of the rate hike cycle in November 2021, rates have been hiked by 475bps to the highest levels in 15 years.

Several property experts have called the unanimous decision to hold interest rates as disappointing but expected.

However, what wasn’t expected was Reserve Bank Governor Lesetja Kganyago’s strong indication that the repo rate probably wouldn’t come down at all this year, pointing instead to the second quarter of 2025.

“The stance of the Reserve Bank has been too hawkish. While inflation has moderated, the reality is that keeping the interest rate so high for so long has done little to bring down inflation, largely as it is not demand-driven but rather ‘imported’ into the economy,” said chairman of the Seeff Property Group, Samuel Seeff.

Even Standard Bank recently signalled concern that the level of home loan distress is rising.

This means homeowners will remain under strain for at least the next six months, making it unaffordable for many prospective buyers.

Evidence of this was noted in the latest TPN Tenant Survey Report 2024, which showed that 58% of respondents stated that financial obstacles are the main reason they choose to rent, with 48.1% explaining that they cannot afford to buy a property.

This proves consumers are struggling to deal with high interest rates, inflation, and limited job prospects.

For 9.9% of respondents, a poor credit record is a barrier to purchasing a property.

Additionally, due to the high expenses associated with homeownership, 11.4% of renters believe it is cheaper to rent, while 2.2% do not want to take on the debt of owning a property.

Good news for landlords

While being tough for tenants and wannabe homebuyers, the current market is a good news story for landlords.

The unaffordability of houses has meant that the demand for rentals has increased substantially since 2021, similar to when the SARB’s MPC started the rate hike cycle.

According to the latest Rode’s Report on the South African property market, flat vacancy rates nationally in South Africa have continually dropped from over 10% in 2020 to 7.9% as of Q1 2024.

This, in turn, has resulted in escalating rentals for landlords, with PayProp’s Rental Index Annual Market Report—2024 Edition noting that the average rent in South Africa sits at R8,598—an increase of R368 year on year and R147 above the previous quarter (Q3).

This trend doesn’t seem to be going away anytime soon, as TPN’s survey shows the majority of tenants aren’t looking to own property in the near future.

The survey showed that only 29.2% of tenants are considering taking the property plunge within five years.

However, the report warned that landlords must be mindful of the prevailing economic conditions.

TPN suggests that the current constrained economy requires property investors and practitioners to carefully navigate stressed consumers by implementing reasonable escalations, ensuring good payment behaviour, and keeping their premises occupied.

Source: Business Tech

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