MARKET INTEL

Intel

2 in 5 Renters Don’t Believe They’ll Ever Own a Home

Up from 27% less than a year ago, 38% of U.S. renters don’t believe they’ll ever own a home, according to a new report from Redfin. With lack of affordability as the prevailing reason, nearly half (44%) of renters don’t believe they’ll buy a home soon because available homes are too expensive. Other common obstacles include: the ability to save for a down payment (35%), the ability to afford mortgage payments (33%), and high mortgage

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Intel

Prime Multifamily Cap Rates Show Improvement

For the first time in two years, financial and operational metrics are improving for Class-A multifamily properties, says CBRE. “Going-in cap rates, exit cap rates and unlevered internal rates of return (IRRs) targets for prime multifamily assets improved slightly in Q1 for the first time since the Federal Reserve began raising interest rates in early 2022,” they wrote. “These improvements indicate that key underwriting metrics may have peaked in anticipation of possible rate cuts later

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Intel

Apartment Demand More Than Doubled in Q1

In the early months of 2024, apartment demand more than doubled, putting it well above the decade average, according to a new report from RealPage. “We might be in for a banner year for absorption,” the firm’s analyst Kim O’Brien said in the report. But truly, RealPage said, this Q1 2024 performance is another indication of a return to seasonal market norms for the US apartment. After dismissing the past three years of “unprecedented behavior

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Intel

These 7 Metro Phoenix Cities See Home Prices Double Fastest

Home prices are reaching for the stars across the country. And Arizona isn’t simply riding this wave — it’s at the helm. Seven Metro Phoenix cities are among the Top 25 cities that have seen home prices double the fastest. We looked at the largest U.S. cities to see where home prices doubled the fastest. With home prices rising in just 6-7 years, here’s what else we found about major Arizona cities: Scottsdale home prices doubled since the end

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Intel

Why More Renters Are Opting Out of Ownership

A house on the corner with a white picket fence and a backyard has long been a big part of the American Dream. But it’s no longer a major factor for a large share of the American populous. For two out of every five renters, in fact, their “American Dream” has nothing to do with owning a house, according to a recent Entrata study. And one in five expect to be renters for life. Entrata’s

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Intel

Community Improvements That Drive NOI

In the never-ending pursuit to remain ahead of the competition—or at least on par with them—owners and operators are constantly considering community improvements. But with margins becoming increasingly tight in the multifamily market due to the elevated costs of materials, labor, and insurance, deciding which upgrades to implement requires a measured and highly strategic approach. Yes, capital projects such as in-home renovations and new amenities generally help to attract and retain residents. Yet, more than

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Intel

Top Markets for Multifamily Investment in 2023

Multifamily investment sharply dropped in 2023, after two years of outstanding performance. The high cost of capital led to a pause in activity across the U.S., seriously denting sales volumes. In this context, we’re taking a look at what the top markets for multifamily investment were last year, leveraging Yardi Matrix data. On the national level, investors acquired a total of $69.4 billion in multifamily assets last year, which was a drop to less than

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Intel

Construction Financing: Needle in the Capital Haystack

In case you haven’t heard, the mantra for many real estate developers and owners this year seems to be “Stay Alive Until 2025.” And I get it: This isn’t the friendliest financing environment. Even if the Fed cuts rates, we’ll probably continue to see a more constrained lending environment with conservative underwriting to mitigate as much risk as possible. Still, capital will be available for multifamily developers that have a good track record and can

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Intel

Multifamily Stages Strong Rebound in Demand

Amid all the angst about the stability of the multifamily sector, there are signs that the market is beginning to work its way through its problems, even though parts of the country, especially in the overbuilt South, still show weakness. A report by Apartments.com, a CoStar Group online marketplace, shows rising absorption, even though vacancy remains high due to oversupply. “The U.S. multifamily market staged a strong rebound in demand during the first quarter of

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Intel

Is Multifamily Real Estate for Sale Overpriced? Lessons for Investors

For 26 years, I have worked as a commercial mortgage banker specializing in apartment building financing. In February, I received a call from a client wanting to purchase a 22-unit building in Portland, Oregon. “I don’t get it,” I told him. “Why do you want to buy this property at a 4.9 cap, put 54% down, and earn a 2.4% return on your cash invested after loan payments?” He explained that the price had dropped

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