The week began with interesting news that multifamily investors should be aware of, starting with a report released by the National Apartment Association (NAA)outlining barriers to multifamily construction.
Greg Isaacson of Multi-Housing News picked up on this report, noting that “community involvement and NIMBY-ism ranked as the biggest obstacle to multifamily development overall. Construction costs—including labor, hard and soft costs—and land costs came in second and third place as issues blocking new apartment construction.”
Source: Multi-Housing News
According to the NAA, Albuquerque, NM, ranked among the easiest metro in the U.S. for building multifamily units, followed by Greenwood, SC, and Dayton, OH. See here for full rankings of cities.
Caroline Basile of Housing Wire reports that the NAA undertook this survey to show that these barriers create higher construction costs, which leads to higher rents and difficulty building affordable housing. Indeed, the U.S. needs about 4.6 million apartment units by 2030 to keep up with demand.
In other multifamily news, Corina Vanek of the Phoenix Business Journal reported this week on Opportunity Zones, and the new reality that developers are still hesitant on these deals because many of them require completely new development instead of the simpler task of renovation.
Real estate vs stock: New poll
Jeffery Jones of Gallup reported late this week that despite stocks having a strong year, investors in the U.S. still prefer real estate investing. “More Americans continue to believe real estate (35%) is a superior long-term investment to stocks (27%) or other investment options.”
Jones and Gallup conclude that investors may place more value on homeownership above stocks because home values are high and Americans expect them to continue to go higher.
Doug Whiteman of MoneyWise reported this week that mortgage rates are heading toward their lowest levels in 2019. “The average rate on 30-year fixed-rate mortgages has dipped to 4.10%, from last week’s 4.14%.” This was in addition to a 2.7% increase this week in mortgage applications.
Ben Eisen of The Wall Street Journal reported this week that lenders extended 38% fewer mortgages with balances between $10,000 and $70,000 in the U.S. last year than they did circa 2009. This means that smaller mortgages are getting harder to come by.
Paul Centopani of National Mortgage News provided some interesting insight into rate disparities between major U.S. metros, showing the 12 housing markets where borrowers save the most over the life of their loan compared to national rate averages.
Source: National Mortgage News
This highlights the benefits of real estate investors shopping around when it comes to finding the best mortgage rate and terms.
#LocalNews: California and Dallas
Starting in Dallas, TX, the Dallas Morning News reported this week that Dallas is the top homebuilding city in the U.S. Dallas was “the busiest housing market in the U.S at the end of the first quarter of this year. Houston came in second. More than 345,000 units were added on an annualized basis in D-FW area as compared to Houston with just over 300,000.”
Dom DiFurio from the Dallas Morning News also reported this week that Dallas took the third spot nationally of places where millennials want to live, according to a new study. Houston and Atlanta took the top spots in the survey.
Louis Hansen of The Mercury News reports on changes to a major California housing bill opening up new possibilities for small apartment construction. “If successful, the bill could make California the first state in the country to overhaul property regulations some say are based on a century of discrimination. Changes to the comprehensive housing measure Senate Bill 50 — already hotly debated — allow property owners broad rights to turn single-family homes and vacant lots into two-, three- and four-unit homes and apartments.”
In addition to the above, Brock Keeling of Curbed San Francisco reports on an informative new flowchart from Alfred Twu to help explain SB 50, the MORE Homes Act.
Source: Curbed San Fransisco