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What part of the Real Estate market is suffering?

2,407 Views | 7 Replies | Last: 2 yr ago by JSKolache
bloom
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Cross posted from another board. Everyone here is in agreement concerning the increase in demand for SFH (single family homes). These buyers are/were living somewhere prior to purchase. Is the RENTAL apartment market seeing weak demand/lower occupancy? I assume some SFH rental owners may be selling to take a profit, which would push tenants into apartments, but somewhere along the chain buyers have to be leaving rentals. It seems like we had a stable chain of young renters to cheap house, cheap house to move up house, etc. and now demand for SFH has increased but the population has not. All of these people purchasing homes (and demand seems high across the country) whether with stimulus money or savings have to be LEAVING some kind of space empty, right? There is not some magic increase in 22 yr olds/apartment dwellers that is filling in the rentals left open at the start of the chain. Are the low priced/undesirable apartments suffering as everyone moves up a step?
mazag08
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AG
The market isn't hot because of some sort of massive abundance of buyers. It's hot because of the historically massive lack of sellers.
CS78
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My monthly cash flow is suffering. Glut of apartments keeping rents flat. Property taxes soaring. Insurance, appliances, repairs, etc all up. I'm worth more on paper but that doesn't pay the bills.
East Dallas Ag
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AG
Anecdotally speaking with a neighbor who works in multi-family development and asset management, apartments are hurting, but especially in west coast/more liberal areas where the homeless have taken over the sidewalks + rioting. Some of the buildings are just empty and boarded up to protect them, others no one wants to live in because the sidewalks and streets surrounding them are completely taken over by the homeless. These were in historically "good" areas before policy changes and enforcement let things go.
mazag08
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AG
East Dallas Ag said:

Anecdotally speaking with a neighbor who works in multi-family development and asset management, apartments are hurting, but especially in west coast/more liberal areas where the homeless have taken over the sidewalks + rioting. Some of the buildings are just empty and boarded up to protect them, others no one wants to live in because the sidewalks and streets surrounding them are completely taken over by the homeless. These were in historically "good" areas before policy changes and enforcement let things go.
Here in Texas we are dealing with a ton of new multifamily deliveries in the major markets. Supply has been flooded. Couple that with Corona and we saw a slight dip in rents last year though occupancy remained flat or even increased (nobody was moving). Through the first quarter of this year we are starting to see rents rising. I've seen properties that have been flat since Harvey that have already booked 3% rent growth this year.

We have a significant portfolio in Birmingham. They have extremely low yearly deliveries and multiple submarkets with new MF development moratoriums that keep supply stagnant. Rents have been exploding there.
itsyourboypookie
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CS78 said:

My monthly cash flow is suffering. Glut of apartments keeping rents flat. Property taxes soaring. Insurance, appliances, repairs, etc all up. I'm worth more on paper but that doesn't pay the bills.


I'll buy them. Or manage them for cheaper. Info@gbtpm.com
itsyourboypookie
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bloom said:

Cross posted from another board. Everyone here is in agreement concerning the increase in demand for SFH (single family homes). These buyers are/were living somewhere prior to purchase. Is the RENTAL apartment market seeing weak demand/lower occupancy? I assume some SFH rental owners may be selling to take a profit, which would push tenants into apartments, but somewhere along the chain buyers have to be leaving rentals. It seems like we had a stable chain of young renters to cheap house, cheap house to move up house, etc. and now demand for SFH has increased but the population has not. All of these people purchasing homes (and demand seems high across the country) whether with stimulus money or savings have to be LEAVING some kind of space empty, right? There is not some magic increase in 22 yr olds/apartment dwellers that is filling in the rentals left open at the start of the chain. Are the low priced/undesirable apartments suffering as everyone moves up a step?


Population is increasing in Texas.

I think certain areas were on the path to being over built, like the metroplex, but then rona gifted Texas a few hundred thousand peeps, and Biden gifted some illegals.

This combined with the price of goods slowing down new builds means apartment demand is still holding up.

Apartments are more affordable than living in a single family home still because of cheaper utilities, no lawn service, and the amenities the nicer ones supply.

Commercial is getting crushed right now though. Lots of retail shopping centers can't find tenants.
BearJew13
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AG
Legacy office product, non-grocer anchored retail, hospitality, urban multi-family.
JSKolache
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AG
bloom said:

There is not some magic increase in 22 yr olds/apartment dwellers that is filling in the rentals left open at the start of the chain.
What about all those college-age/recent grads living at home for a few years, saving money, on their parents insurance/Obamacare til age 26, etc now flush with cash after working from home & not traveling and/or flush with $7k stimmy checks. There could be millions in this cohort.
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