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The Southern U.S. housing market faces a potential bubble with increased home supply and declining demand. While experts are divided on a crash vs. normalization, high homeowner equity and ongoing migration offer some stability. Buyers and sellers, stay informed! #HousingMarket #RealEstate #HousingBubble #SouthernUSA #HomePrices #MarketTrends #COVID19Impact #HomeBuyers #RealEstateInvesting #MarketAnalysis

Will Robinson, HousingWire. The boom in single-family rental prices during the pandemic has come to an end, according to CoreLogic's Single-Family Rent Index. While the index showed significant annual growth of 13-15% in the first half of 2023, the latest data for November indicates a rise of only 2.7%. CoreLogic's Principal Economist Molly Boesel attributes the 2022 price surge to a spill-over effect from the for-sale market, which is facing inventory challenges in the current high-mortgage-rate environment. Rental demand has remained high as prospective homebuyers opt for renting due to these challenges. However, the year-over-year rent price growth has returned to the 2-4% range seen before the pandemic, with some cities like Austin and Miami even experiencing annual declines. Austin, in particular, saw a significant rise in rent prices as tech workers moved in, but an increase in multifamily units has led to a decline in demand for single-family rentals. Despite these localized trends, Boesel expects national rental prices to grow at a rate of 2-4% per year. The increased construction of multifamily units nationally, outpacing single-family construction, has contributed to the stabilization of rental prices. Boesel anticipates that an increase in homes listed for sale could further moderate rent price growth, depending on the trajectory of mortgage rates. #rentalmarket #housingtrends #realestate #pandemiceffect #rentalprices #propertymarket #housingdemand #homeownership #renting #marketanalysis #economicindicators #AustinRealEstate #MiamiHousing #rentalgrowth #housingmarketupdate #multifamilyconstruction #singlefamilyhomes #mortgagerates #propertyinvestment #marketstabilization

Multifamily Development Trends to Watch in 2024 Housing Shortages Keep Multifamily Risk Low Multifamily housing will remain a low-risk asset class as housing shortages in the United States continue to drive demand over the next couple of years. Housing shortages have resulted in a drop in annual home sales and high mortgage rates. Single-family homes are in a continued decline, as homeowners are choosing not to sell due to high-interest rates, creating more opportunities in the multifamily sector. Even amid uncertain market conditions, multifamily development can be a fairly low-risk asset class as demand remains high and remains a better investment than office or retail projects.  High Demand For Small and Luxury Apartments  Luxury apartment demand has remained steady over the past few years due to rising housing prices and mortgage rates, and these properties are likely to remain resilient. Vacancy rates for Class A rentals jumped 30 basis points from the end of 2022 through the midpoint of 2023, as compared to a 40-to-80-point basis point jump for Class B or Class C. High barriers to homeownership are supporting demand for luxury housing among certain demographics, such as millennial renters, and this will remain the case into the next year.  Demand for smaller, more affordable units has also persisted over the last couple of years, and the average size of a multifamily unit is shrinking. As costs to build multifamily development increase, developers are planning projects with smaller units, especially in metropolitan areas with limited space for construction. High rents make these small, affordable units more attractive to prospective tenants as well. so construction and demand for small units can be expected to grow in 2024. -Northspyre

📊 Housing Market Shift: A Statistical Snapsho🏠 The American housing narrative is being rewritten, not with deeds, but with leases. Here’s the latest statistical update on the rental home surge: Construction Climbs: Single-family rental home construction has seen a 39% increase from the previous year. Record Highs: 2023 marked a milestone with 93,000 new rental homes completed, the highest ever recorded. More on the Horizon: Approximately 99,000 rental homes are currently under construction, signaling a continued trend. Occupancy Outperforms: Single-family rentals boast higher occupancy rates than multifamily buildings. Pricey Mortgages: With mortgage rates over 7%, renting is becoming a more attractive option for many. Strategic Investments: Companies like Invitation Homes are investing in hundreds of under-construction homes across key cities. 🔍 The Cost of Living: The median renter now spends 31% of their income on housing, surpassing the federal government’s cost-burdened threshold. 💡 The Takeaway: As homeownership hurdles mount, the rise in single-family rentals offers a glimpse into the future of American housing. Join the discussion on our blog and share your thoughts on this significant market shift. #HousingData #MarketTrends Read the full analysis 👉 The Rise of Rental Homes: https://lnkd.in/ev3Dezpt

Multifamily Markets See Silver Lining Despite Economic Headwinds Like other property sectors, rental housing assets have experienced big swings in fortunes over the past few years. Historically high rent growth during the pandemic came to a halt amid new supply in many markets. And the end of cheap debt has stymied investment sales and is stressing investors who paid handsomely for apartments using short-term financing. But the situation could be worse. Housing remains in high demand, and despite higher mortgage rates and a collapse in home sales, a severe lack of inventory on the market continues to prop up home values and price out would-be buyers. In May, home prices across the country increased 5.9 percent over the previous year, according to the latest S&P CoreLogic Case Shiller U.S. National Home Price NSA Index. Rental housing owners and operators are the obvious beneficiary of those challenges, says Ivy Zelman, executive vice president and co-founder of Zelman & Associates - A Walker & Dunlop Company that provides housing research, analysis and consulting. Move-outs attributed to home purchases clearly illustrate the trend. An apartment and single-family rental operator in Phoenix recently told Zelman that such move-out activity has dropped to about 13 percent from an historical average of 30 percent, she says. Similarly, a multifamily landlord told her that move-outs related to home buying have fallen by half, to around 7 percent. “The number of homes for sale continues to be highly constrained, and as a result, home price appreciation remains pretty significant,” says Zelman, whose firm is holding its 17th annual housing summit in Boston on September 12 and 13. “Multifamily turnover is hovering at record lows despite a more competitive lease-up environment in many markets.” https://lnkd.in/dV8YjXpH Sponsored by Walker & Dunlop #cre #commercialrealestate #multifamily #investmentsales

Detroit's housing market has emerged as a top contender, outpacing Miami's vibrant market. In November 2023, Detroit witnessed an 8.7% surge in home prices, the highest YoY increase among 20 metro areas tracked by CoreLogic. Despite this, Detroit remains one of the most affordable large metros in the US, making it an exceptional option for homebuyers. Detroit's housing market is highly competitive, with homes selling rapidly and some receiving multiple offers. The median home sale price is $80,000, and the sale-to-list price ratio for all home types is 80.0%. The Detroit housing market forecast for 2024 shows resilience and growth, with a balance that offers opportunities for both buyers and sellers. The average home value in the Detroit-Warren-Dearborn area is $238,284, reflecting a 4.0% increase over the past year. The market forecast for the next year is -1.1%, which may pose a slight challenge for sellers. However, with ample inventory and negotiating power, homebuyers may find this period favorable. Detroit is a historically significant city with contributions to the automobile industry, music, art, and culture. The Detroit real estate market has been growing, making it an attractive destination for real estate investors looking for long-term returns. Detroit's rental market has seen significant growth, offering several advantages for long-term investors, such as the potential for long-term asset appreciation, a relatively low cost of entry, and a high demand for rental properties. Take advantage of investing in Detroit's rental market to secure a reliable source of income. https://lnkd.in/ejR95yFi

Multifamily Markets Adjust as Homebuying Stalls, Investment Cools Like other property sectors, rental housing assets have experienced big swings in fortunes over the past few years. Historically high rent growth during the pandemic came to a halt amid new supply in many markets. And the end of cheap debt has stymied investment sales and is stressing investors who paid handsomely for apartments using short-term financing. But the situation could be worse. Housing remains in high demand, and despite higher mortgage rates and a collapse in home sales, a severe lack of inventory on the market continues to prop up home values and price out would-be buyers. In May, home prices across the country increased 5.9 percent over the previous year, according to the latest S&P CoreLogic Case Shiller U.S. National Home Price NSA Index. Rental housing owners and operators are the obvious beneficiary of those challenges, says Ivy Zelman, executive vice president and co-founder of Zelman & Associates - A Walker & Dunlop Company that provides housing research, analysis and consulting. Move-outs attributed to home purchases clearly illustrate the trend. An apartment and single-family rental operator in Phoenix recently told Zelman that such move-out activity has dropped to about 13 percent from an historical average of 30 percent, she says. Similarly, a multifamily landlord told her that move-outs related to home buying have fallen by half, to around 7 percent. “The number of homes for sale continues to be highly constrained, and as a result, home price appreciation remains pretty significant,” says Zelman, whose firm is holding its 17th annual housing summit in Boston on September 12 and 13. “Multifamily turnover is hovering at record lows despite a more competitive lease-up environment in many markets.” https://lnkd.in/dV8YjXpH Sponsored by Walker & Dunlop #cre #commercialrealestate #multifamily #investmentsales

A good read on how institutional SFR owners are adapting their acquisition strategy. In the current real estate landscape, driven by soaring interest rates and record-high home prices, Wall Street investors are adapting their strategies to maintain profitability. The traditional approach of acquiring individual homes scattered across the country is becoming inefficient and less lucrative. As a result, a new trend is emerging - the development of build-to-rent communities designed for families. Key Points: Market Trends and Challenges: Interest rates are at multiyear highs, making traditional home purchases less attractive. Home prices reached a fresh record high in October, creating challenges for investors seeking suitable returns. Shift in Investor Behavior: During Q3 2023, large landlords owning 100 to over 1,000 housing units acquired only 1% of U.S. homes, down from approximately 3% in 2022. Institutional investors, traditionally dominant in the apartment market, are now eyeing single-family homes for their stronger rent growth and longer tenant stays. Challenges in Bulk Purchases: It is becoming harder for investors to acquire newly built houses in bulk, as the limited housing inventory prompts builders to sell directly to regular buyers instead of offering discounts to institutional investors. Rise of Build-to-Rent Communities: Wall Street is increasingly turning to the construction of new neighborhoods where every home is designed for rental purposes. The "build-to-rent" model is gaining traction, with an estimated 10% of new housing construction dedicated to these communities. Efficiency and Cost Savings: Centralizing rental homes in one community reduces operational costs, such as maintenance and repairs. Investors benefit from designing entire neighborhoods, ensuring durable construction with features like hard-wearing countertops and wide hallways. Growing Concept and Industry Players: The National Association of Home Builders reports 900 build-to-rent communities nationwide, each averaging 135 to 150 homes. Real estate investment trusts like American Homes 4 Rent are actively constructing over 2,000 new family homes, while others are forming partnerships with housebuilders. Potential Impact on Housing Shortage: The build-to-rent trend may alleviate pressure on the scarce housing market, where the shortage is estimated to range from 2 to 4 million homes. However, concerns arise regarding the potential lack of charm in these new, rationalized neighborhoods. In summary, the real estate landscape is evolving as Wall Street investors adapt to challenges by embracing the construction of purpose-built, rental-focused neighborhoods. This shift not only addresses the current market dynamics but also offers potential solutions to the persistent housing shortage in the United States. #wsj #sfr #affordablehousing #btr #economy #housingmarket

🏢 Rising Demand in Rental Housing: What's Driving the Surge? 🔥 The multifamily housing market is booming, and it’s no surprise why. With various economic and demographic shifts, more people are turning to rental options, making multifamily properties an attractive investment. But what’s behind this rising demand? 📊 Key Drivers Behind the Rental Boom: Affordability Concerns: Homeownership costs have skyrocketed, pushing many to rent instead. A report from The Wall Street Journal points out that “average mortgage rates have surged to over 7%, pricing out millions of potential homebuyers.” Generational Preferences: Millennials and Gen Z are embracing flexibility and urban living, where renting is more accessible. According to The Urban Institute, “these younger generations are choosing to rent longer, valuing location and amenities over the commitment of homeownership.” Supply Chain Challenges: Limited new housing construction is straining the housing market, further pushing up rental demand. The National Multifamily Housing Council reported that “we need 4.3 million new apartments by 2035 to meet growing demand.” 💡. There is a growing shift in the American Dream. Owning a home is no longer a default goal for many, and as this mentality changes, the demand for multifamily rentals will only increase. At Sky Capital, LLC, we’re committed to helping investors tap into this growing market. Whether you're new to multifamily or looking to expand your portfolio, now is the time to seize these opportunities. 📈 Let’s talk about how you can benefit from this shift and secure your place in the multifamily market. DM me! #RealEstate #RentalHousing #MultifamilyInvesting #WealthCreation #SkyCapitalLLC

Is it cheaper to rent than buy in the U.S ? 🏡 🇺🇲 The latest rental data from Realtor.com paints a stark picture of the challenges facing prospective homebuyers in today's housing market. In a noteworthy turn, renting has become the more affordable option compared to homeownership in all of the top 50 metro areas across the U.S., a shift from just a year ago when this was the case in 45 of those markets. This reversal is primarily attributed to rising buying costs fueled by robust demand, limited housing inventory, and increased borrowing rates in the for-sale market. Meanwhile, rental prices have begun to soften as developers introduce new rental housing in major urban centers, according to the report. The 10 metros with the biggest rent vs buy savings: - Austin-Round Rock-Georgetown, TX – $2,165 monthly rent savings (141.5% difference) - Seattle-Tacoma-Bellevue, WA – $2,422 savings (121.1%) - Phoenix-Mesa-Chandler, AZ – $1,528 savings (99.0%) - San Francisco-Oakland-Berkeley, CA – $2,689 savings (95.5%) - Los Angeles-Long Beach-Anaheim, CA – $2,539 savings (89.7%) - San Jose-Sunnyvale-Santa Clara, CA – $2,780 savings (86.7%) - Nashville-Davidson-Murfreesboro-Franklin, TN – $1,366 savings (86.0%) - Portland-Vancouver-Hillsboro, OR/WA – $1,396 savings (84.4%) - Sacramento-Roseville-Folsom, CA – $1,514 savings (82.1%) - Houston-The Woodlands-Sugar Land, TX – $1,103 savings (80.0%) While the financial advantage may currently lean towards renting, the decision to rent or buy involves more than just price considerations. Factors such as flexibility, long-term housing plans, and personal circumstances play pivotal roles in this decision-making process, emphasizing the importance of weighing the trade-offs between renting and owning for prospective buyers. ❓ What factors do you believe are most critical for individuals to consider when deciding between renting and buying ? ❓ 🔗 https://lnkd.in/di8jWpdP #RealEstate #HousingMarket #Homeownership #RentingvsBuying #FinancialPlanning