Even Taylor Can’t Save Home Sales 🎵
The Property Management Pulse
💡 Today’s newsletter is a 2-minute, 25-second read. What's on the menu: Exploring the impact soaring interest rates, combined with a constricted housing supply, is impacting the housing market, the pending sales plunge and a plot twist: The flipping game is back.
The Hemlane Brief 📊
Must know data at a glance.
5.25% - 5.50%
🚨 What's next: Rates are at a 22-year high and the Federal Reserve is expected to raise rates again. (CNN)
Deep Dive: The Future is Bright For Multifamily ☀
Apartments aren’t going out of fashion anytime soon.
Fortune is finally favoring the multifamily sector. New apartment construction is experiencing its best years in over 5 decades. Per RentCafe:
- Over 1 million apartments were built over the past 3 years.
- Another 1 million apartments are being built over the next 2 years.
- Almost 500K apartments launched this year.
Priced out: With wannabe home buyers unable to enter the homeownership market because of the higher mortgage rates in addition to the limited inventory since potential sellers stay put, multifamily owners are excited about their prospects.
Think Black Friday, but every day: Supply currently exceeds demand which was reflected in recent data: rents in August were just 0.28% higher than last year.
The exceptions? New Jersey and New York where even Spiderman would find it challenging to even afford a windowsill. New York occupancy is at 98% in a city of over 8 million people which means a 77-square-foot apartment with NO bathroom can easily get rented for $2,370.
👉 Takeaways: Conditions look favorable for multifamily for the next year and possibly longer, even while property expenses, such as insurance, rise. (Multifamily Dive). P.S. We offer no-stress white-glove lease management services.
Mortgage Rates Rundown 🏦
Traveling back to the year of the Bush vs. Gore showdown.
- Year 2000 deja vu: Mortgage rates have now surged to their highest level in 23 years. Guess they finally escaped “the lockbox”. (CNN)
- Cooling demand: Mortgage demand shrinks as rates continue to climb. (CNBC)
- Lenders crackdown: Credit and loan denials are rising. (USA Today)
Housing Stats 🏘️
It’s been a cruel summer for buyers seeking bargains.
- What a difference a year makes. Pending sales of existing homes were down 18.7% YoY while new home sales were up. More data and details at NAR, Census.Gov.
- RTO > WFH. A high portion of the homebuyers who are moving are relocating to new metro areas. The reason? Potentially return-to-office mandates. (Redfin)
- Flipping is (sort of) back: ATTOM's Q2 2023 report showed that every one out of 13 homes were flipped. Read the full report.
Rental Market Outlook 🔮
Even billionaires want in on rentals.
- Rich men beyond Richmond: How the mega-rich are also betting on renters to grow their billions. (Bloomberg)
- Expenses continue to pile up for multifamily owners: While tech like Hemlane’s platform has helped apartment owners on the cost front, these other costs are eating into profits. (Multifamily Dive)
- 2024: boom or bust? Experts cast their predictions for Multifamily Executive.
Trends We're Watching 🔎
Living with the 'rents never went out of style.
- Adulting is overrated: The share of people in the US ages 18 to 29 who are living with family is at the same level as in the 1940s. (Bloomberg)
- Looming legislation: Lobbyists are tracking legislation that will impact evictions and affordable housing in three key states. (Multifamily Dive)
- Empty spaces and hybrid places: How cities' commercial spaces will be transformed into residential hubs. (Fast Company)
Hemlane News ✨
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