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Household income grew by 18% in the past 50 years, while rents soared by 60%. If you haven’t heard, it’s not easy for renters these days. But the complaints are not an exaggeration.

Examining census data from 1960 to present day, a new report has illustrated the drastic — but very real — drop in housing affordability nationwide.
Though median rents have increased by 64 percent between 1960 and 2014, median household incomes grew by only 18 percent in the same time, according to an analysis by rental listing website Apartment List cited by the Wall Street Journal.

And unless something major happens, the trajectory will continue.
Renters had the worst of it between 2000 and 2010, according to the Journal — thanks in part to a recession and then a housing bust, inflation-adjusted household incomes fell by 9 percent while rents increased by 18 percent during that period.

Economic crises notwithstanding, reasons for today’s challenging housing situation include land-use restrictions, rising construction costs and disproportional migration trends, in which more people are moving to already-expensive cities like New York and San Francisco. Whereas globalization has driven down the cost of other products, housing still relies on domestic resources, according to the Journal.

Predictably, Apartment List cites the worst cities for renters as San Francisco, New York City, Boston and Washington D.C. There are, however, cost-effective options. For instance, in Austin, income growth has matched that of rent in recent years. And not all renters are flailing.

A report by property management software maker RealPage found that the trend of rising rents and diminishing housing supply has little negative impact on mid- and high-earning renters. It’s low-income households that suffer the most from the affordable housing crisis. [WSJ] — Cathaleen Chen

Source: realestate_iq

With all that’s going on in the world from Brexit to Zika, U.S. investors may want to consider keeping their money at home in multi-family real estate projects.

But not necessarily in publicly traded real estate investment trusts. ” Buying real estate is better done on a direct basis,” said Eric Jones, chief investment officer of Dome Equities. “Public REITs are too correlated to the public market and interest rates in particular.

Jones spent 11 years at Citibank and GE Capital prior to joining Dome Equities. While at Citibank, Jones spent two years directing its private bank’s private equity co-investment platform. The private bank platform was the genesis of Dome.

Dome Equities is a New York-based private equity real estate investment firm specializing in core plus, value-add, and opportunistic strategies in U.S. Real Estate with a current focus on multifamily rental properties. Jones said he is targeting 7% to 9% yields on his portfolio, with a low-teens total return.
Jones said higher income suburban locations in major metropolitan areas will outperform urban core for apartment investment. In his view, new supply in urban core areas with slowing growth coupled with investors currently paying too low of cap rate is a recipe to lose money, even in multi-family apartments.
He prefers to focus on regions with above-average growth in prime renter demographics and regional economies with strong economic vitality. Jones said his favorite locations right now include North Miami Beach, Orlando, Dallas and Denver.

Jones said the demographic trends are also compelling for the multi-family apartment space as millennials are still primarily renting. “Home ownership rates for people under the age of 35 have not found a bottom yet,” said Jones. “They are getting married later in life. That makes them rent longer. And there is a record number of millennials living at home.”

Source: realestate_iq

Dallas real estate continues to push the limits on home sales. As the country’s home prices continue to rise, Dallas follows right along. In a recent seven-day span, 2,506 listings came onto the market in the Metroplex and 2,305 listings were sold. This may sound normal, but it is not. It is incredibly uncommon that there are almost as many homes being sold as there are being listed. It is a sign that there is an overwhelming demand and little supply.

In Dallas we are seeing any home up to about the $2 million range being sold immediately. Homes that are priced well are snatched up before an open house can be held. The last three homes where I have represented the seller sold in less than seven days and went under contract well above asking price. In central Dallas, where newly built communities are rare and land is scarce, a property that is on the market over 30 days is seen as stale.

The buzz among Realtors is that a shift is coming in 2016. It is only recently that we are starting to hear about more relaxed mortgage rules. The prices that are being slapped onto some homes are unsubstantiated. Recently a 2-bedroom, 1,400-square-foot home in the M-Streets — an ever-popular neighborhood because of its central location, excellent elementary schools and limited area — was listed at $525,000. Less than one year ago you could have gotten a comparable home with well over 1,400 square feet and an extra bedroom in the same condition for under $500,000. This same home would have been listed in the $200,000 range during the Great Recession less than a decade ago.

What about the ultra luxury market? Using Lakeside Drive in Highland Park as an example, where there is a total of about 30 homes, there are three active homes for sale and one that is pending. Here we have four homes on the market that are over $7.5 million. They have been struggling to sell these properties since there are multiple options, each with their own historical tale. Listed between $700 and $1,300 a square foot, these homes move up in price depending on the level of grandiose detail.Much like the recent $100 million dollar home sale in Dallas, these sellers are noticing their once $3 million to $5 million dollar house, is now worth $7 million to $10 million. The summer approaches and while many people are forced into this rabid market because of a new job or an approaching school year, the market continues to push prices higher and higher. The presidential election is the only thing holding sellers and buyers on the sideline. Without a doubt, it is a seller’s market and the buyers must beat out one another to gain some type of solid footing in this city.

Texas has 1,200 people moving here every day. Half of those people are coming to the Dallas-Fort Worth Metroplex. Dallas development has always progressed north. The suburbs, new-home developments, and population has been going north for over 20 years.

Source: realestate_iq

The gender pay gap is following women home from the office.
Buying a home is a better financial move for men than women, as the average market value of homes owned by single men is 10% higher than homes owned by single women, according to a new report from RealtyTrac.
What’s more, male-owned homes appreciate at a faster clip. Homes owned by single men have increased in value by nearly $64,000 since they were bought, more than the average of $53,809 homes owned by single women gained.

Here’s what’s happening: Women on average earn less than men, which reduces how much home they can afford — hence that 10% gap in home values.

That lower purchasing power has a lasting impact, explained Daren Bloomquist, senior vice president at RealtyTrac, and limits single women’s ability to build wealth since their homes tend to appreciate slower.

“Homeownership is not as an effective wealth-building tool for single women as it is for a single man. And that will have implications, especially down the road,” he said.

Many people rely on their home’s equity to buy a bigger home in the future or help fund retirement or their kid’s college education.
And the home appreciation gap widens over time, the report showed.

A home owned by a single man for at least 15 years saw an average 145% return on its sale price while female-owned homes saw a 127% return on purchase price.

The study analyzed 2.1 million single-family homes across the country that are owned by unmarried adults.

The appreciation gap was the widest in West Virginia, where men had a 72% higher average home value than single women.

There were eight states where single female buyers had bigger home value gains, including New York at 30% more followed by New Jersey at 29%.

Source: realestate_iq