Jon's Reading List - Week of May 14, 2021

Posted By: Jon Lowder Blog ,

Interesting stuff I'm reading this week:

Local Apartment Deals

Peters announces plans for new apartment community in High Point (Triad Business Journal, April 26, 2021)
The High Point-based company said it was near completion of plans for Peters Village, a 108-unit multifamily project on 4.5 acres at 3621 Peters Court – near the intersection of Skeet Club Road, Wendover Avenue and Eastchester Drive. The community will have four, three-story buildings.
Construction is expected to begin in summer 2021 with occupancy available in 2022. 

332-Unit Apartment Community in Greensboro Sold (Triad Business Journal, May 12, 2021)
A large apartment community in the Triad sold Tuesday for $28.75 million — almost triple the price it sold for in December 2018 prior to extensive renovations — according to Guilford County online records.
An LLC controlled by the Loring Group of Cincinnati bought the 332-unit, Village 1373 community at 1373 Lees Chapel Road in Greensboro from an LLC controlled by Arcan Capital of Marietta, Georgia. According to apartments.com, rent for the 1-3 bedroom units are priced between $625 and $785 per month.

Apartment Industry

Apartment Rents Rose Last Month at Fastest Pace Seen in a Decade (GlobeSt.com, May 10, 2021)
Effective asking rents for US apartments climbed 1.3% in April, rising at the fastest pace seen during a single month for the past decade or so and likely at the fastest pace ever...
April’s strongest rent increases occurred in the luxury Class A properties that had taken a pricing haircut in many cases over much of the past year. Class A communities registered 2% rent growth for the month, compared to increases of 1.3% for the middle-market Class B projects and 0.3% in the Class C inventory.

More Apartment Dwellers Likely to Stay Put as Home Affordability Declines (GlobeSt.com May 10, 2021)
Rising material costs and supply shortages along with expected increases in mortgage rates are expected to keep a growing number of potentially prospective home buyers in multi-family rentals.

Biden Tax Proposal Would Squeeze Apartment-Building Owners (Wall Street Journal, May 12, 2021)
The Biden administration’s plan to limit a longstanding property-tax break could disrupt the business of investing in apartment buildings, discouraging both amateur and professional investors who helped fuel record multifamily sales...
President Biden proposed limiting the profits that investors can defer from 1031 exchanges to $500,000. U.S. investors save billions on their tax bills this way every year...
In addition to capping like-kind exchanges, Mr. Biden’s plan would raise the top capital-gains tax rate to 43.4% from 23.8%.

Housing

Housing-Market Surge is Making the Cheapest Homes the Hottest (Wall Street Journal, May 12, 2021)
U.S. ZIP Codes where the median home cost less than $100,000 in early 2018 have had a 42% rise in prices in the three years since then, according to a CoreLogic Inc. analysis for The Wall Street Journal. That is about double the rise for ZIP Codes where the median was between $150,000 and $200,000, and triple the rise in locales with $300,000-plus price tags.

U.S. Home Prices Surge, Scaring Off Some Potential Buyers (Wall Street Journal, May 12, 2021)
The median sales price for existing single-family homes was higher in the quarter compared with a year earlier for 182 of the 183 metro areas tracked by the National Association of Realtors, the group said Tuesday. In 89% of those metro areas, median prices rose by more than 10% from a year earlier...
Nationwide, the median existing-home sales price rose 16.2% in the first quarter to $319,200, a record high in data going back to 1989, NAR said.

How Will Remote Work Affect Housing After the Pandemic? (Rental Housing Journal, May 10, 2021)
“In a survey of 5,000 employed adults across the U.S., we found that four-in-10 workers expect to have some form of continued remote-work flexibility post-pandemic. Nineteen percent expect to have a hybrid arrangement that allows for remote work multiple days per week, while 21 percent expect that they’ll have the ability to work exclusively remotely,” Apartment List said in the report.
Apartment List Housing Economist Chris Salviati said, “I would say that this report provides a lot of valuable new data to confirm trends that we’ve been hypothesizing about for a while. Namely, a broad embrace of remote work will be an ongoing long-term trend that will outlast the pandemic, and this newfound geographic flexibility will have a direct impact on where these remote workers choose to live” and housing after the pandemic.

Visualizing the Recent Explosion in Lumber Prices (Visual Capitalist, May 8, 2021)

Source: Visual Capitalist

The Global House Price Boom Could Haunt the Recovery from COVID-19 (Wall Street Journal, May 7, 2021)
The year of the pandemic saw the largest increase in global house prices since the U.S. housing boom of the mid-2000s. And there is no sign the rally is coming to an end.
That provides immediate economic support for the global recovery from Covid-19. But a prolonged house price upswing would mean big new problems for financial stability. And it could result in economic strife if middle-class citizens accustomed to a one-way housing bet suddenly find the rug pulled out from beneath them down the line.

General Business

Employers Prepare for a Wage Jolt (Wall Street Journal, May 12, 2021)
There are disagreements about why hiring is so hard now: Some people point to the continuing lack of child-care options, for example, while others lay the blame on enhanced unemployment benefits lowering the incentive to work. The reality is probably that, in the wake of an unprecedented crisis, there are many things happening at once.