Jon's Reading List - Week of May 21, 2021
Interesting stuff I'm reading this week:
Local Apartment Deals
Renovated Winston-Salem apartments sell for triple price paid in 2018 (Triad Business Journal, May 19, 2021)
A small, recently renovated apartment community in Winston-Salem has sold for $1.935 million — triple the sale price three years ago. Cedar Mill Apartments, a 24-unit complex at 1410 Brewer Road was purchased by Phelps Capital LLC (81%), controlled by Thomas Phelps of Albemarle, and Bogey Enterprises LLC (the remainder), controlled by Chad Chisholm of Holly Springs, from an LLC based in Johns Creek, Georgia. Marcus & Millichap represented the both parties.
Materials Shortages, Skyrocketing Prices Will Lead to Construction Delays for Multifamily (GlobeSt, May 17, 2021)
But lumber isn’t the only material seeing price shocks. Steel and copper and brass mill spaces also began rapidly increasing in late 2020, with upticks of 67% and 49% year-over-year, respectively, and gypsum and ready-mixed concrete remain difficult to obtain, according to survey respondents. “Pricing has increased since the pandemic began in March 2020, and the increases became more acute after the initial shutdown,” Walter said. “These increases can be traced to increases in demand for the products as well as supply chain issues. But it’s important to note that these numbers do not mean that inflation is here for good. Rather, the current issues may only persist in the short term. Until supply chain and demand pressures ease, prices will likely remain elevated.”
Yes in My Backyard Act a Key Step in Addressing Housing Affordability(Forbes, May 18, 2021)
The demand for apartments far outstrips the supply in much of the country. The result is the nation needs to build 328,000 new apartments annually to meet demand. The bill would remove barriers that hinder their development, but significant barriers, including exclusionary single-family zoning policies and NIMBY (not in my back yard) opposition have frequently hindered these efforts.
Apartment Rents Rebound in Tech Hubs (GlobeSt, May 19, 2021)
While tech centers like San Jose, Calif. (-12.5%), San Francisco (-10.9%), and Seattle (-7.3%) are still experiencing declines, those are lessening, especially for two-bedroom apartments, according to realtor.com. In Denver and Austin, rents have risen 2.2% and 1.7%, respectively, year-over-year. “In tech centers, rent declines are getting smaller, signaling they are on the path to turnaround, said realtor.com Chief Economist Danielle Hale in prepared remarks. “If the trend continues, renters could expect to be paying pre-pandemic rates by as early as this fall.”
Single-Family Posts Largest Rent Increase in Four Years (GlobeSt.com, May 21, 2021)
The single-family rental market has seen the biggest rent increases in more than four years, according to CoreLogic. The big driving forces: demand, high-end properties, and the pandemic aftermath. Rents on single-family properties were up 4.3% year over year in March. That compares to the 3.0% rate in March 2020 and the 1.4% low in June 2020. The data includes condominiums. In general, rental vacancy rates in 2020 and 2021 were at their lowest levels since at least the late 1990s, according to Census Bureau data. In the first quarter of 2021, that was 6.8%, including houses and apartments. For homeownership housing, the vacancy rate was 0.9%
Real-Estate Frenzy Overwhelms Small-Twon America (Wall Street Journal May 20, 2021)
Home prices in the U.S. have shot up in the past year, driven by limited supply, record-low interest rates and buyer demand. Bidding wars have spread from such high-profile locations as Palm Beach, Fla., and the suburbs outside New York City to smaller cities and towns, including long-neglected locales where properties typically sat on the market for months. Local buyers bid against one another as well as against investors who now comprise about a fifth of annual home sales nationally. Online platforms such as BiggerPockets and Fundrise make it easier for out-of-town investors to buy real estate in smaller cities across the U.S., said John Burns of California-based John Burns Real Estate Consulting.
Startup Owned by Berkshire Hathaway to Offer a New Spin on Modular Construction (Wall Street Journal, May 18, 2021)
MiTek Inc., a Missouri-based construction-technology company, is launching a new modular building venture with New York City-based architect Danny Forster & Architecture. The company plans to build entire rooms for hotels and apartment buildings in factories, and then send them to a construction site to be stacked on top of each other. MiTek has more than 6,000 employees and sells building components, construction software and services like engineering. The company said it is investing tens of millions of dollars in the modular venture, and plans to start working on its first projects early next year.
The CDC's new mask guidance caught businesses by surprise. It's likely to cause headaches, too.(Triad Business Journal, May 19, 2021)
While the CDC provides recommendations and guidance, Troutman said employers need to be aware the Occupational Safety and Health Administration is the agency that actually enforces federal workplace standards and could cite employers for violations...Until OSHA clarifies its position, Troutman said employers have a lot of factors to consider. Workplace safety should be paramount, he said, but he acknowledged continued mask requirements could frustrate some workers or even lead to turnover...Troutman said many businesses are choosing to let employees who are vaccinated be exempt from mask requirements. But that also allows customers and fellow workers to infer who has and hasn’t been vaccinated, and that information ideally would be kept confidential.