Zumper’s Post

According to a study by Florida Atlantic University, rents in Florida cities have started to go down, although demand is still strong; Jacksonville saw the biggest rent price decline in the nation. The decline in rent prices in Florida could signal a turning point in the rental market. However, it's important to note that demand for rental properties is still strong in Florida, which could mean that prices will continue to be high in some areas. https://lnkd.in/eh5CXj2b

This is not my usual type of article, nevertheless, the housing market affects us all. Therefore, it is important to be aware of key terms, such as "Average" and "Median" rent. When analyzing the housing market and following media coverage, an interesting question arises: Is average rent the same as median rent? For some, the answer might be an obvious "yes", yet not understanding the distinction could be more problematic than anticipated. I invite you to read my latest piece on Planetizen's Exclusives! #urbanplanning #averagerent #housingmarket #housing #market

Our May National Rent Report is live! 💰The national rent index saw monthly growth rates of over 1% for the first time in 20 months 📈Syracuse & Columbus had the fastest growing rents, both up over 20% since this time last year 📉The majority of California cities saw declining annual rates Read the full report now & see how your city fared: https://lnkd.in/guMyTEa

𝗥𝗲𝗻𝘁𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗨𝗦: 𝗦𝘂𝗻 𝗕𝗲𝗹𝘁 𝗦𝗹𝗼𝘄𝗱𝗼𝘄𝗻 𝘃𝘀. 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲 Renting trends across the US are showing a fascinating divergence. expand more While the national median asking rent reached its highest level since October 2022, major Florida metros like Jacksonville and Tampa are bucking the trend with significant rent declines. expand more 𝐅𝐥𝐨𝐫𝐢𝐝𝐚'𝐬 𝐑𝐞𝐧𝐭 𝐑𝐞𝐯𝐞𝐫𝐬𝐚𝐥 : Florida's rental market, once scorching hot, is experiencing a cool down. A record 12.4% year-over-year decline in Jacksonville and a 6% drop in Tampa paint a clear picture. Exclamation This reversal can be attributed to two factors: Oversupply: Florida witnessed a surge in apartment construction during the pandemic to meet booming demand. Now, with that demand tapering off, landlords are competing for tenants, leading to price reductions. 𝐏𝐚𝐧𝐝𝐞𝐦𝐢𝐜 𝐂𝐨𝐫𝐫𝐞𝐜𝐭𝐢𝐨𝐧: Rents in Florida skyrocketed during the pandemic, pushing affordability concerns. This decline could be a return to a more sustainable equilibrium. Exclamation National Rent Rise Nationally, rents are edging upwards, driven by young renters opting to stay put due to a challenging homebuying market. Exclamation However, this growth is limited by the influx of new apartment buildings entering the market, keeping a lid on price hikes. 𝗚𝗲𝗼𝗴𝗿𝗮𝗽𝗵𝗶𝗰 𝗗𝗶𝘀𝗽𝗮𝗿𝗶𝘁𝘆 : The rent story varies greatly by region. While Sun Belt metros like Austin and Jacksonville see significant declines, cities in the Northeast and Midwest, which haven't built as aggressively, are experiencing rent increases. The Midwest's relative affordability also makes it an attractive option for renters. expand more Key Takeaways Renters in Florida and Austin may find themselves in a negotiation-friendly market. Exclamation The national rent picture reflects a delicate balance between renter demand and burgeoning supply. Geographic disparities in rent growth persist, with affordability concerns playing a significant role. Stay tuned for further insights on the evolving rental market! #rentalmarket #realestate #multifamily #housingaffordability #florida

Some staggering statistics from the Harvard Joint Center for Housing Studies: 14 Million households who need help are not getting it! 12 percent of renter households are behind on rent. The US has reached an all time high of >650,000 people experiencing homelessness. Considering the deep generational effects that housing instability can have on families and the high financial costs of instability on tenants, communities, and governments, addressing this support gap and re-stabilizing housing requires an all-hands on deck approach.

🏡 Is the rental crisis finally coming to an end? 📉 According to researchers at Florida Atlantic University and two other schools, rents across the country are on the decline, providing hope for renters and potential opportunities for investors. 📊🌇 🔻 In December 2023, 52 measured metropolitan areas experienced a drop in rents month-over-month. This trend builds on the previous month's data and suggests that supply is finally catching up with demand in the multifamily sector. However, it's still too early to draw definitive conclusions. 📉📈 🌴 Florida cities have also begun to witness a slowdown in rent increases, with Palm Bay, Orlando, Tampa, and Miami all experiencing declines. While this is good news for renters, it's important to note that rents in Florida are still higher than their long-term trends. 💼💰 🏢 Despite these positive developments, renters are still paying a premium for housing, indicating that an affordability crisis persists nationwide. Solving this crisis will require the construction of more housing units and the alignment of wages with costs. 🏗️💪 ✨ As a real estate and marketing professional, I believe this shift in the rental market presents new opportunities for both renters and investors. It's crucial for us to stay informed about these trends and navigate the evolving landscape wisely. Let's discuss how we can leverage these changes to achieve our real estate goals! 📈💼 #RealEstate #RentalMarket #AffordabilityCrisis #InvestmentOpportunities #FloridaRealEstate #MarketTrends

We've been through a lot in the past decade when it comes to the housing crisis in San Diego. Remember the #rentwastoodamnhigh movement? Well, the good news is that rents are finally leveling off. Even with an increase of $400-700/month for a one-bedroom, the market is stabilizing, making it more attainable for middle-income earners. The bad news is that with less development supply in the last year or so, rents will only continue to rise with strong demand in San Diego's powerful economy. If investors and developers proceed cautiously and put more cash down to buy down their construction debt costs, interest rates should drop into safer levels, rents will continue to rise at a steady pace, sales / valuation risk will diminish when cap rates are common again under 4.5-5 trending down with interest rates. Check out this article on the state of San Diego's rental market and the image of Casa Verde North Park (www.casaverdesd.com), a recent poster child of the rents, leasing market and the progress of the City’s award-winning density bonus program.

📉 Rent-to-income ratios for market rate apartments have dipped below 23% nationwide, reaching 22.7% as of June. 📊 Key Midwest markets like Detroit and Chicago attract renters with some of the lowest ratios, while California's Riverside and San Diego lead with the highest. #RealEstateTrends #RentToIncome #MarketInsights

The 1/3 rule that between 30%-33% of a person's income should go to rent is simple yet significant. It helps to determine a benchmark where rents ideally should be capped. This is because a tenant has other living expenses that they have to allocate their income towards. If the rental amount is too high, and the resident has less income to allocate towards living expenses, they may get delinquent on paying a certain % of the rent. This is what is called the "bad debt" factor. I know from recent years the bad debt factor is an issue many real estate investors especially multifamily syndicators have neglected.   There are sub markets across the US I recognize where residents may pay more than 1/3 "30%-33%" of their income towards rent. This is large urban environments such as NYC, LA, Chicago, etc. These are called primary markets to be clear. These locations have large populations in the millions and rentals can be quite competitive. Sometimes certain secondary markets may be included as well please note.   I have seen from my case review of deals where some residents are paying 40%+ of their come towards rents. While this isn't ideal it is what the reality is. With that said, I want to discuss how to approach issues like this from a UW perspective.   When reviewing sub markets where tenants are paying more than 33%, it is vital to get as much info on the economic losses. While this should take place for all income rental ranges, it is more significant for CRE rental markets where tenants are paying more than 1/3. Find out the sub market economic loss % and cultivate as much related data as possible.     Certain major questions that come to mind are as follows:   What are the sub unit types where the bad debt applies to more than others? Is there any data on collections success of recouping some of this loss rental income? What are the cost of rental collections within the sub market of question?   What are the type of jobs that the tenant base have that are contributing to the economic loss? What are the eviction laws like for this sub market where tenants are paying more than 33% of their income that has more economic loss?   Due to the locations where these urban assets are stationed, the cost of operations "operating expenses" can be higher. Therefore, the economic loss has to be factored in properly along with the other expenses, to see how it will affect the NOI, the capital structure, and see if investment returns can be realistically achieved. One must be really more critical when dealing with markets where the norm is residents pay more than 1/3 of their income. I don't think many CRE professionals especially apartment sponsors recognize this.

The Tribune wrote a classic article--"The rent is too damn high". I agree with the basic concept, but there is no discussion of why the rent is too damn high other than seasonality. The reality is that a large array of policy decisions have been made that make the cost of building a new apartment much higher in Chicago. 1. Affordable housing set asides. If 20% of the apartment are lottery tickets for selected moderate income residents, the remaining 80% of the apartment must produce all of the return on the cost of construction. 2. Real estate taxes. About 20% of every rent dollar goes to property taxes. Most renters have no idea how much real estate taxes are paid on their apartment. If they did, they might make different choices when voting. 3. Restrictive zoning and building codes. Parking requirements, building material requirements (no plastic drain pipes, etc), accessory dwelling unit restrictions all make housing more expensive. The real estate development community and city planners need to come together to create work force housing designs, zoning and construction methods that are affordable to the area median income on a market basis without subsidies. We may not attain perfection, but we can make great strides in the provision of more affordable rental housing in the City of :Chicago for the many, not just the lucky few who win a lottery for a subsidized apartment. https://lnkd.in/gZYRAYc3