One Big Thing
Economic data is beginning to show signs that the recent surge in US inflation is peaking, despite higher than expected CPI readings that were heavily influenced by massive inflation in used cars. Capital Spectator
The second half of this year could be really interesting if supply chain issues begin to resolve and cost pressures dissipate, while rent inflation – which tends to not be persistent and not transitory – continues to strengthen.
It sounds odd given how hot the market has been for a while now but we could be approaching a sweet spot for multifamily property performance. The question, as always is whether or not investors can find opportunities where this dynamic is not already reflected in asset prices.
What I’m Reading
Target Rich Environment: With a constantly changing mix of office and remote workers, and devices that move in and out of the company networks, the hybrid workplace is a cybersecurity nightmare. Wall Street Journal
Reversal: The impact of the pandemic is being felt in apartment design. After years of decline, the average size of new apartments is growing as developers add home offices. RENTCafe
Incentives: In markets like New York where COVID coincided with a substantial amount of new apartment inventory delivery, developers have continued to offer aggressive concessions to fill vacancy and get to stabilization. New York Times
Root Cause: COVID gets most of the credit/blame for wealthy people relocating to sunbelt markets. However, the trend was well underway when the pandemic hit and much of it can be traced back to the implementation of the SALT cap in 2017. Globe Street
Cautionary Tale: Ketchum, Idaho is one of my favorite places on earth. It’s also an unfortunate example of what happens when a COVID-induced influx of high earners moves into a small town on a full time basis, sending property values and rents to the stratosphere and displacing local service workers from teachers to waiters in the process. (h/t Steve Sims) Yahoo News
Chart of the Day
US job openings are at an all time high and US workers are quitting voluntarily at the fastest pace on record as well.
Source: The Daily Shot
WTF
Stealth Bomber: An Ohio motorist yesterday lost control of his vehicle and slammed into a utility pole after a cicada allegedly flew into the car through an open window and struck him in the face. Now that there is a precedent, I’m using the bug excuse next time I get in a fender bender. The Smoking Gun
Duel: A fight over a TV remote ended with one man stabbing another with a sword because Florida. Click Orlando
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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