What I’m Reading
Taking Aim: AirBnb’s CEO Brian Chesky thinks that his platform will eventually take over the traditional multifamily market as the company makes further inroads into the longer-term leasing space. Chesky’s thoughts here are that tenants will value flexibility and be willing to pay on a month to month subscription basis.
I’m highly skeptical of this as it allows for sometimes massive month to month pricing fluctuations depending on supply and demand, not to mention potential regulatory headaches when dealing with longer term tenants. The pay upfront month-to-month program may work for a handful of affluent young people who have the ability to work remote but I highly doubt that it will take over a large portion of the rental market. The Verge
Don’t Call it a Comeback: 2021 has been a banner year for apartment rent growth thus far with rents nationwide rents now surpassing where they would have been had the pandemic never happened. ApartmentList
Inside Deal: Real-estate agents are selling more homes to select customers while bypassing the public market, a move that squeezes supply tighter for many buyers when inventory is already near record lows. So-called pocket listings have been around forever but have been growing in popularity as the market has tightened. It often results in the house selling for less money but can also be a less hectic and chaotic process which gives the realtor on the listing a better shot at not splitting the commission. Wall Street Journal
Backorder: Shortages in everything from labor to land and lumber have caused the backlog of unbuilt homes — those that have been sold, but construction hasn’t even started — to surge over 16% in the last month. Bloomberg
Overwhelmed: Moving companies are overwhelmed with demand thanks to a nationwide moving spree and a shortage of truck drivers. As a result, people are going weeks in their new homes while their belongings are still in transit. Wall Street Journal
Chart of the Day
I’m old enough to remember when investors and lenders wanted to see a substantial cap rate premium over traditional multifamily for single family rentals.
Stabilized Cap Rates for Single Family Rentals
Source: Rick Palacios, Jr.
WTF
Proportionate Response: A man was arrested for allegedly spraying his neighbors with roach spray and attempting to use nunchucks on them — hitting himself in the head instead — over a loud music complaint because Florida. Boston 25 News
Have it Your Way: A 77-year-old woman – who was upset over the thickness of a tomato on a Whopper – faces a felony battery charge after police say she threw a burger at a Burger King employee before calling her several racial slurs because Florida. ABC 3
Basis Points – A candid look at the economy, real estate, and other things sometimes related. Visit us at RanchHarbor.com