What's New:

As we finish up the 3rd quarter of 2021 and head into the 4th quarter, it will be interesting to see how the coronavirus pandemic continues to affect the housing and construction industries. Our next issue will contain reflections on the year as well as predictions for 2022.

Update on the SECURE Act and the future of closings:

As you know, CSS has been performing Remote Online Notarization (RON) closings for many years. Digital mortgage closings – also known as eClosings – were accelerated by the need for homebuyers and mortgage lenders to remain socially distant amid the COVID-19 pandemic. While Michigan and 37 other states have legalized the RON closing, some states have not yet done so. However, some experts believe that eClosings could be legalized across all 50 states by 2022, as eClosings and remote online notarizations (RON) gain more traction.

In our last newsletter, we talked about the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (the “SECURE Act”). The legislation would authorize every notary in the US to perform remote online notarizations using audio-visual communications and tamper-evident technology, making remote transactions more accessible for consumers. Requirements for a signer to physically be in the presence of a notary are often impractical and sometimes impossible due to social distancing constraints resulting from COVID-19, as well as other barriers, including military service or work travel.

RON has been increasing in popularity in recent years, growing 547% from 2019 to 2020, according to a survey ALTA conducted of major vendors working in the RON space. Some experts believe the SECURE Act could pass as soon as this year, or into 2022, making the closing process even easier and more accessible for all consumers.

CSS will continue to keep you updated on the passage of this legislation.

Market News

Housing Market to remain stable

• Foreclosures are predicted to make up the smallest single source of available inventory at just 5.4%.
• Homeowners listing their houses should make up 40% of inventory in the coming year.
• Expiration of the eviction moratorium is not expected to have major impacts on rent prices.
• Appreciation should moderate but will stay historically high over the next five years.
• The housing market should stay stable as homeowners exit forbearance on their mortgages.
• Rents and vacancies are not expected to rise dramatically following the end of the federal eviction moratorium.

Home Building Market gains some stability

Homebuilder sentiment improved for the first time in three months as lumber prices eased and buyer demand grew. “The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity, as reflected in the September HMI,” said NAHB Chief Economist Robert Dietz. Although lumber prices have dropped and supply chain issues have lessened, the biggest hurdle for builders in the coming months will be affordability, as they are forced to raise prices in order to keep up with still higher than typical construction costs, and extending their completion deadlines due to delayed delivery times and the labor shortage.

Update: 1031 Exchanges on the firing line once again

As you know, Section 1031 has been on the radar for elimination or substantial limitation. On Sept. 15, the House Ways and Means Committee completed the markup of its portion of the $3.5 trillion Budget Reconciliation Bill. At this point, Section 1031 was not amended and remains intact. However, this is the beginning, not the end of the Budget Reconciliation process. The Budget Reconciliation Bill could still be modified by the House Budget and House Rules Committees before being voted on by the House. In addition, the legislation may differ from the version being prepared in the Senate committees, which have not yet acted on the legislation. Final passage of the legislation will not be until sometime between October and November of this year and we will continue to update you.