What’s Trending In Real Estate – March

REA Newsletter 3.13.24

Renters Are Still Moving—These Markets Are Where You Should Be Investing

Moving Trends March 2024 - REA Accounting Newsletter

Rents across the nation increased rapidly over the course of the pandemic, but renters in high-cost cities were particularly squeezed. Even after rental hikes slowed and rent prices fell in some areas last year, the median asking rent in New York City sits near its peak at $3,500 per month. Rising rents, along with high prices at the grocery store and everywhere else, likely became too much for some residents of the West and Northeast, driving outbound migration from those areas.

Rent prices remain elevated relative to before the pandemic, and Apartment List data show that the exodus from pricier states continued in 2023. California and New York lead the states with the highest outbound migration, both in absolute terms and as a share of the total population. For example, the data show 1.1% of residents leaving New York and 0.9% of residents leaving California.

A significant share of Hawaii, Alaska, and Illinois residents were also looking to leave the state in 2023. In absolute terms, New Jersey and Massachusetts were behind New York and California.

Some more affordable states, on the other hand, have seen more renters seeking to move in than out. These include Florida, Texas, North Carolina, South Carolina, Delaware, and Tennessee. The top states for inbound migration as a percentage of the total population were South Carolina, which exhibited a 1.6% change, and Delaware, with a 1% change.

People leaving California were most likely to search for apartment homes in these states.

Click Here To Read Entire Article (source: BiggerPockets)

Ban Corporate Landlords: A Housing Crisis Solution Or A Distraction?

Corporate Housing
Bills recently proposed to curb corporate ownership of single-family homes seem well intentioned in the face of a housing affordability crisis. In 2023, investors purchased a record-high share of homes in the same year that housing became the least affordable it’s ever been to middle-class buyers. Given the already intense inventory shortage, first-time homebuyers are shut out as investors buy more of the limited number of single-family homes for sale.

Multiple bills at the state and federal level have been proposed to curb corporate ownership of homes. A California proposal that aims to prevent large corporate landlords from expanding their rental portfolios aligns with the sentiment that profiting off the housing shortage is immoral. A Nebraska bill would ban out-of-state corporations from buying single-family homes. Two congressional bills, the Stop Wall Street Landlords Act and the End Hedge Fund Control of American Homes Act, would target large corporations, imposing taxes and outright bans to address the issue. But unfortunately, on close inspection, these bills wouldn’t do much to improve housing affordability.

The bills proposed range in severity from excluding large investors from real estate tax breaks to outright banning large corporations from single-family home ownership. But there is a self-contradiction: if the goal is to address the housing shortage, shouldn’t the focus be on any entity profiting from it, regardless of size? If it is considered immoral for large corporations and hedge funds to profit from the housing shortage, why is it acceptable for anyone to profit from the housing shortage? Why do we offer tax breaks to small corporations and wealthy individuals owning multiple single-family homes during a housing shortage?

Click Here To Read Entire Article (source: Forbes)

60% Of Office Vacancies Concentrated In 10% Of Buildings

Commercial Real Estate Vacancies

A small pool of underperforming office buildings is bearing the brunt of lost occupancy and dragging down absorption data, according to a new analysis by JLL.

Despite record levels of overall negative net absorption, only 12.7% of offices reported negative absorption, JLL said. That is the lowest proportion since the third quarter of 2017 and below the average of 14.4% over the last 20 years.

“One of the interesting paradoxes of the office market over the past few years is that there has been record occupancy loss, but the share of buildings experiencing the ‘down market’ is small,” Jacob Rowden, research manager of U.S. offices, told Bisnow. “The vacancy increases in that segment of the market have just been especially intense.”

Over 60% of office vacancy is centralized in 10% of buildings, with 39% of buildings having no vacant space, according to the brokerage.

Click Here To Read Entire Article (source: BizNow)