Times are Changing for U.S. Malls

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U.S. malls are reeling as restaurant and retail tenants struggle to stay open for business.  Coresight Research data predicts that a quarter of U.S. malls could close over the next 3 to 5 years. Simon Property Group, America’s biggest mall owner, said that its 2020 fourth-quarter revenue dropped by 24%. However, experts think the Simon Property Group does not stand to be the biggest loser as its more distressed competitors will close their doors. Simon expects to see gains from its new additions of hotels and luxury residences.

The CDC Takes Steps to Extend the Eviction Moratorium

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The CDC is poised to extend and possibly improve the moratorium on evictions. The eviction moratorium will expire in less than two weeks. The expiration could potentially put over 1 million people out of their homes.  With nearly 10 million Americans behind on their rent, Congress approved over $50 billion for rental assistance. However, the state and local channels have just now opened up the application process. The vast majority of people who need the assistance will not receive it in time should the eviction moratorium be allowed to expire in March.

16% Jump in Foreclosures for February 2021

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Despite foreclosure and Covid-19 relief measures for homeowners, foreclosures are actually on the rise. A report from ATTOM Data Solutions shows a 16% jump in foreclosures from January to February and notes an upward trend in 29 states. The government’s moratorium bans foreclosures on federally backed loans for homeowners and protects borrowers in the forbearance program. Loans on commercial and investment properties, and properties that are vacant and abandoned don’t garner the same protections, accounting for the slight increase. The yearly data still shows a significant decrease in foreclosures over the same period in 2020.

Housing Counselors Prepare for Surge

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Calls from homeowners concerned about foreclosure have fallen while interest from homebuyers has surged. The trend points to an uneven economic recovery and the hidden impact of lost jobs and lower income. When federal foreclosure and eviction protection ends, housing counselors aren’t sure what to expect, as they are currently just guessing at the financial state of homeowners who may also be grappling with delinquent utilities, insurance, and car bills.

FHFA Extends Forbearance Plans

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The Federal Housing Finance Agency lengthened forbearance extensions for Fannie Mae and Freddie Mac borrowers, allowing coverage for up to 18 months. Eligibility is limited to borrowers who are on a Covid-19 forbearance plan as of February 28, 2021. Some borrowers may now be in forbearance through August 2022. This may impact the timing of the impact of foreclosures discussed in last week’s Weekly Brief.

Bath & Body Works Shifting Stores To Off-Mall Locations

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Retailer Bath & Body Works, which saw a surge in sales due to the COVID-19 pandemic, is planning to simultaneously open 49 off-mall locations, while closing 40 mall locations, in 2021. This will essentially keep the store count level but will shift stores away from malls to freestanding locations.

Mall Retailer Victoria’s Secret Closing Up To Fifty Stores In 2021

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Victoria’s Secret, a brand of L Brands, intends to close up to 50 stores in 2021. This is after the closure of 250 stores in 2020. L Brands continues to look for a solution to its Victoria’s Secret problem, including spinning the brand off to a private equity firm.

Biden Extends Foreclosure Moratorium & Expands Relief Program

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Using a three-pronged approach, President Biden rolled out mortgage protections. He extended the expiration date for the foreclosure moratorium from March 31 to June 30 and extended the enrollment window to request a mortgage payment forbearance. The third protection allows borrowers to defer mortgage payments for an additional six months. Eligible homeowners must have enrolled in a forbearance plan by June 30, 2020.

Homebuyer Mistakes That Can Derail or Delay Closing

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Sometimes, first time home buyers don’t know what they don’t know.  Buyers need to be proactive at the start of the home buying process or common mistakes can stall their efforts. Some proactive steps include paying attention to the paperwork when it’s first received to check for errors, making sure the property assessment matches or is under your offer by doing your market research before submitting your offer and keeping a tight rein on big-ticket spending prior to closing.

Home Buyers Face Bidding Wars

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Due to a record low supply of homes on the market, 56% of home buyers face bidding wars in their offers. This is an increase of 52% from December of 2020. More than half of the homes listed go under contract in less than two weeks. Lower interest rates are making expensive homes more affordable, but a low market supply forces homebuyers to act quickly.