What I’m Reading
On the Move: Most multifamily management companies set retention goals for the properties that they manage of 50% or higher. However, the majority are falling far short of this goal according to a new manager survey from manager software platform Zego.
The most interesting part?
C projects, which are in chronically short supply across the US, typically have the best retention rates: in Q1, Class C resident retention clocked in at 61.9%. Conversely, Class A apartments usually post the most churn; resident retention when Class A leases expired during the first quarter was limited to 47.6%, according to RealPage Chief Economist Greg Willett.
In the Money: Homeowners with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400. CNBC
Driving Force: This week’s CPI reading was higher than expected and car prices drove much of the move. Car and truck rental was up a whopping 294% annualized while used cars and trucks were up 132% annualized. Rental and used car inflation is about as transitory as it gets and will normalize once supply chain issues get ironed out. Calculated Risk Blog
Can’t Keep Up: Major RV maker Thor Industries reported a $14.32 billion backlog, a 550% increase YOY and it’s CEO says that it is “pretty much sold out for the next year.” (h/t Steve Sims) Business Insider
Thor is not alone and demand in the RV and boat space is through the roof. My view remains that the best way to play this from a real estate standpoint is RV and boat storage, even more so than the luxury campgrounds that seem to be popping up everywhere. I have no clue whether or not (or how frequently) people will actually be using their new vehicles and boats in the coming years. What I do know with absolute certainty is that buyers (or the people that they ultimately sell to) will need a place to store these vehicles and boats.
On Watch: With the housing market booming and rates still low, bond traders are anticipating that the Federal Reserve may begin scaling back their purchase of mortgage bonds sooner rather than later. The Real Deal
Charts of the Day
Inflation components decoupled in the mid 1980s when services became a lot more expensive while durable goods got better/cheaper.
The recent increase has been driven in large by a spectacular rise in durable goods, which surged to a 36% annualized rate from March to April.
Source: The Grumpy Economist
WTF
Caught with Pants Down: A 21 year old woman who was naked from the waist down inside a Circle K told a cop that “another deputy told her it was fine to do that” because Florida. The Smoking Gun
Show Me The Lie: North Korean despot Kim Jong Un called K-pop a ‘vicious cancer’ that merits work camp or possibly execution as punishment for those caught listening. Look, I don’t like the guy any more than you do but that doesn’t mean that the point isn’t valid. New York Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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