What I'm Reading Round Trip: Mortgage rates are back to 2019 levels but prices are far above where they were in 2019. Calculated Risk IMO, the impact on stressed home affordability on rent growth is still being generally underestimated, despite the explosive growth over the past year or so. Pile...
February 18th – Shelter in Place
What I'm Reading Shelter In Place: Higher interest rates will make move up buyers with low, fixed mortgage rates and tons of equity less likely to move. Instead, they will likely renovate or expand their existing homes. At the same time, builders confidence is declining as rates rise and supply...
February 17th – Tale of the Tape
What I'm Reading Tale of the Tape: Mortgage debt as a percentage of GDP sits just below 50%, high on a historical basis but nowhere near GFC levels of over 70%. Calculated Risk Roll Up: Blackstone's BREIT purchased Sunbelt rental apartment owner Preferred Apartment Communities in a 5.8 billion deal. ...
February 15th – Upside-Down
What I'm Reading South of the Border: Californians looking for lower mortgage or rent payments are increasingly heading south to Mexico for more affordable prices, and the influx of residents has sparked a real estate boom in Tijuana. Fox Business As I have said in this space before, of of...
February 14th – Squeezed
What I'm Reading Squeezed: U.S. housing affordability continues to get worse by the day as home prices rise alongside mortgage-interest rates. Wall Street Journal Roadmap: The 2013 taper tantrum and 1994’s crunch are good examples of how a bond bear market does not always need to equal recession. Bloomberg Crosswinds:...
February 11th – Coming in Hot
What I'm Reading Coming in Hot: YoY inflation is now 7.5%, the highest rate since 1982. As expected OER, which tends to be sticky turned sharply higher. This seals the deal for a 25 basis point increase at the Fed's March meeting. It also increases the odds of a 50...
February 10th – Shrinkage
What I'm Reading Shifting Focus: Foreign investment in US commercial real estate has exceeded pre-pandemic levels. The big difference is that overseas investors are focusing much more on warehouses and apartments than they were before the pandemic - just like domestic investors. Wall Street Journal Rise of the Machines: Advances...
February 8th – Fire Sale
What I'm Reading Fire Sale: Retail rents are plunging in Manhattan as a lack of office workers makes businesses less viable. On the positive side, falling rates and aggressive concessions have led to falling availability as tenants snap up prime locations at a discount. Bloomberg Decelerating: CoreLogic is projecting that...
February 7th – Defying Gravity
What I'm Reading Defying Gravity: Apartment leasing is typically a seasonal business, with demand cooling with the weather in the winter months. That has not been the case in 2021 and thus far in 2022. Both Q4 occupancy and January occupancy increased for the first time in history, according to...
February 2nd – Rush Hour
What I'm Reading Rush Hour: Buyers are scrambling to purchase homes while rates are still low. In the meantime, supply is down substantially. As a result, buying has become even more competitive, especially at lower price points leaving prospective homeowners stuck between soaring rents and unobtainable ownership. CNBC Widening Out:...