Shannon Huffer Esq.’s Post

Happy Friday! And on this Friday, we have two interesting headlines for #MultiFamily and #ResidentialRealEstate. First, asking rents have declined for the first time in four years. What is the driving factor? Vacancy. In a time when #AffordableHousing is a top issue, not only for people's day-to-day, but also as a hot-topic issue for this year's election, it is important to understand what areas are experiencing the highest drops in asking rates and what has contributed to those drops. Hint, it is not #RentControl, but instead it is building more units through development (and in some cases the over-development), of #MultiFamilyRealEstate. As reported by CRE Daily, "Texas and Florida, which have both seen a boom in multifamily construction, recorded the most declines. The metros with the largest rent declines include: 1. Austin, TX: -16.9% 2. Jacksonville, FL: -14.3% 3. San Diego, CA: -12.7% 4. San Francisco, CA: -7.6% 5. Tampa, FL: -5.9%" Second, renting has now become more affordable than owning a home in all major metros, as of July '24. Anyone in #RealEstate over the last 4 years can touch on how expensive ownership costs have gotten. Between rising values, subsequent rises in property taxes, insurance expenses, material expenses, maintenance expenses, utility expenses and finance expenses, ownership has become a more of a dream than reality for more and more #Americans. Fundamentally, this is an issue because how can you ask a population of non-owners to have a skin in the game without being invested into the country? That is accomplished by quite literally owning a piece of the country's land by owning a home. In fact, this principle is so important that it has a place in the National Association of REALTORS® Preamble to the Code of Ethics: "REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership." It is in that last sentence, "...widest distribution of land ownership." Becoming a rental state is not the #American way. That is not the white-picket fence #AmericanDream.

🏡New on USA TODAY's website: A look at the #buildtorent trend.   📈Build-to-rent communities have served senior populations for decades. In recent years, though, they have taken off and targeted younger tenants who cannot yet afford a down payment on a home.   In 2023, builders completed an estimated 97,000 build-to-rent residential homes, an increase of 45% from the prior year and a record for the sector, according to estimates from John Burns Research and Consulting.   While leasing may not fulfill the typical #AmericanDream of #homeownership, some experts view any addition to the #housing supply ‒ including more #rental properties ‒ as positive.   "For many, renting is just the only affordable option," said Susan Wachter, a real estate professor at The Wharton School.

"American dream is on life support now." How one financial professional characterized our 'Vampire Fed Rate', mortgage-less economy. Most people understand we live in a retail economy, no longer based on making what we consume. And to make up for the short-fall in the drop in value for most of the Working Class, credit has kept the wheels of American business turning. Take away the credit and you have exactly what you expect - a recession that forces the Working Class further and further into poverty from an unsustainable lifestyle. What's going on behind the scenes is not an accident, or just 'good business'. There's nothing good about an economy manipulated to force the Working Class into one giant 'Mill Village'. It's not that the American Dream is dying. It's that it's become a virtual nightmare for many, and some still expect the 'Lesser of Two Evils', owned by Wall St. and the Wealthy, Inc. to fix it.

The #builttorent trend threatens the economic future of millions of ordinary people of the U.S. It’s another way for Wall Street Oligarchs to accumulate wealth at the expense of working people and retirees that can no longer find work. I know the #realestate industry moguls will tell the people that single family homes built for rent are but a small percentage of homes on the market. But that’s how all harmful economic revolutions begin - they start small and then snowball to the point where it becomes difficult to reverse the trend. Back in 1970, HOAs ( #homeownersassociations and #condominiums ) were rare, but now they are nearly impossible to avoid in many growing #housing markets. The majority of Americans don’t want HOAs and they don’t want to rent a home. They would rather own their own house and the lot it occupies. Preferably without HOAs of any kind. We need to nip the #builttorent trend in the bud. Or in a few decades, we’ll be engaged in a difficult process of trying to undo making us a nation of renters.

This is a great idea for people like myself who can't afford to own and frankly don't want to yet. But call this what it really is... luxury rental housing. This does NOT fix the low home ownership rate amongst people of color, provide any wealth or credit building, or improve existing rental conditions. Meanwhile, people are still going to be in public housing or in older homes riddled with lead, asbestos, mold, etc. NOAH needs to be preserved to outlast these building trends because eventually once the market cools those rentals will probably just be sold as condos or single-family homes.

Apartment landlords who spent the last two years saddled with higher costs and dwindling revenue may soon catch a break as early signs of rent growth materialize.Rents are beginning to inch up in metros where new product has been muted, a trend expected to put upward pressure on the nationwide average even as a supply glut bears down on the Sun Belt. But whether that relief comes at the expense of the CRE industry at large is still uncertain, with some fearful that rent growth could stall long-awaited interest rate cuts even longer. The proverbial light at the end of the tunnel is good for apartment owners, especially after a prolonged period of pain caused by elevated interest rates, rising operational costs and the pressure to compete on price with newer, nicer product. But some worry rent growth could be bad for CRE as a whole, as it may discourage the Federal Reserve from cutting interest rates anytime soon. Shelter inflation, the government’s measure of home and apartment rents, is a large driver of consumer price index results that could delay an interest rate cut. Around 575,000 new apartment projects debuted last year, and another 475,000 are coming in 2024. The number of deliveries is not expected to normalize until 2025, when that number is expected to drop to 350,000. Whether the return of rent growth will deter the Fed from lowering rates remains to be seen, though some economists believe it won’t happen quickly enough to alter decision-making, especially considering the significant lag between asking rents and CPI rents. There’s still a long way to go in terms of shelter price inflation coming down. Insofar as there have been gains in rents, they aren’t very big … and it will take 12 to 18 months for those to actually feed through into the shelter price. #cre #commercialrealestate #Commercialrealestateadviser #creinvesting #crelending #multifamily

Renters this spring will have more options than they did last year, as a lot of new apartments have been delivered since then. According to data from CoStar, the stock of apartments in the U.S. increased by approximately 600,000 over the last year, and there’s more coming soon. The number of apartments under construction nationwide peaked last summer, but is still near an all-time peak, with just under 1 million units currently being built. Many of these apartments are coming to market now. As a result, we can expect the surge in new apartment supply to continue throughout this year and into the first half of 2025. While renters will have more choices this year, the future supply pipeline of apartments (as measured by apartment starts) is now also falling, and in the long run there is still a national housing shortage. Estimates of this shortfall vary, but the average estimate is about 3 million units of housing undersupply. Currently, there are approximately 1.7 million units of housing under construction (apartments and homes). If all of those units came to market tomorrow ready to sell or lease, we’d still likely have a housing shortage. Of course, all real estate is local, so this shortfall varies considerably by market. An oversupply of apartments will provide renters with greater options this spring and for the remainder of the year. However, the long-term housing shortage will limit the decline in rent growth. Based on current trends, it looks like demand may catch back up to supply in late 2025 or in early 2026. First American Title Phone:609.528.6860 https://lnkd.in/eSNEAety #FirstAmericanTitle #FirstAm #titleagency #titleinsurance #njrealestate #newjerseyrealestate #njtitle #njrealtors #njrealestateagents #newjerseytitle #NJTitleServices #NJRealEstateServices #CREXfactor

Do $1 home switches work long-term? Will they be able to swing it long-term, or will these properties eventually end up owned again by the city? Wondering if there is any research on how successful these programs are in long-term outlook for the new homeowners. #NewarkHousingProgram #DollarBuildings

Exploring the implications of Southern California's home price surge on the Inland Empire housing market! According to a recent CoStar Analytics report, the region experienced significant home price growth in 2023, surpassing national averages. The rapid escalation of home prices, particularly in areas like Los Angeles and Orange County, has widened the gap between owning and renting, making homeownership financially out of reach for many residents. What does this mean for the Inland Empire? Folks who want to own will move to the IE. It's what's happened for decades now. That will drive prices in the I.E. up. Gentrification alert! Displaced folks displacing folks. It's an interesting phenomenon. At CGX, we're closely monitoring these trends to better serve our clients and navigate the evolving housing landscape. By staying informed and proactive, we're well-positioned to address the unique needs of our clients in the Inland Empire market while promoting inclusive development practices that mitigate the risks of gentrification. As such, we're in the pre-development phase of a mixed-use, mixed-income development project in San Bernardino called the LaunchPad. Check out https://lnkd.in/gD-Q2j6E for more information. More to come! #SanBernardinoRealEstate #Carrillogroupcany #Gentrification #resimmercialrealestate #responsibledevelopment #cgx